Basis: Section 3.2-109 of the Code of Virginia
establishes the Board of Agriculture and Consumer Services as a policy board.
Section 3.2-802 of the Code of Virginia authorizes the board to establish
regulations under which certain plants can be listed as noxious weeds.
Moreover, the board may adopt regulations pertaining to regulated articles and
conditions for their movement, under which the Commissioner of the Department
of Agriculture and Consumer Services may proceed to conduct eradication or
suppression activities to prevent the dissemination of noxious weeds in the
Commonwealth. The board may also adopt regulations governing the movement of
regulated articles entering the Commonwealth from other locations.

Purpose: The proposed amendments to 2VAC5-317 are
necessary in order to align the language of the regulation with changes enacted
in the 2016 Session of the General Assembly and to clarify some of the existing
regulatory language. This regulation assists in protecting the Commonwealth's
agricultural and natural resources from the detrimental impact of noxious
weeds. As the establishment of a noxious weed can lead to significant economic
losses due to associated eradication and control costs, this regulation also
assists in protecting the economic welfare of citizens.

Rationale for Using Fast-Track Rulemaking Process: The
proposed changes to the regulation are intended to align the regulation with
changes enacted in the 2016 Session of the General Assembly and to clarify some
of the existing regulatory language. The Noxious Weeds Advisory Committee,
which the existing regulation establishes, has discussed and reached consensus
on the proposed changes to the regulation.

Substance: Prior to the 2016 Session of the General
Assembly, the Noxious Weeds Law defined "noxious weed" as "any
living plant, not widely disseminated, or part thereof, declared by the Board
through regulations under this chapter, to be detrimental to crops, surface
waters, including lakes, or other desirable plants, livestock, land, or other
property, or to be injurious to public health." Chapter 171 of the 2016
Acts of Assembly amended the definition of "noxious weed" by removing
the "not widely disseminated" condition and excluding from
eligibility for declaration as a noxious weed those living plants or parts
thereof for which in-state production is commercially viable or that are
commercially propagated in Virginia. In response to the new statutory
definition for "noxious weed," the agency proposes to amend the
definitions for "Tier 1 noxious weed" and "Tier 2 noxious
weed" in the regulation. The proposed amendments also move two weeds from
Tier 1 to Tier 2 as a result of the change in definitions. Tier 1 noxious weeds
are those noxious weeds not known to be present in the Commonwealth; therefore,
the agency proposes to move Beach vitex and Wavyleaf basketgrass from Tier 1 to
Tier 2, which is defined as any noxious weed that is present in the
Commonwealth and for which successful eradication or suppression is feasible.
Additionally, the proposed amendments establish a definition for "Tier 3
noxious weed," but the agency is not prepared to declare any Tier 3
noxious weeds in this regulatory action.

To address the concerns that nurseries and landscapers
expressed regarding their ability to continue selling commercially viable
plants already in the trade, the General Assembly, in 2016, also added the
following requirement to § 3.2-802 of the Code of Virginia, which
establishes the board's authority to declare a weed noxious: "Prior to
designating a living plant or part thereof as a noxious weed, the board shall
review the recommendations of an advisory committee established by the
commissioner to conduct a scientific risk assessment of the proposed plant. The
assessment shall include the degree to which the plant is detrimental to crops;
surface water, including lakes; other desirable plants; livestock; land or
other property; public health; the environment; and the economy. The advisory
committee shall also include in its recommendations to the Board an analysis of
the current and potential in-state commercial viability of the specific plant
species and the economic impact on industries affected by the designation of
the plant as a noxious weed." The proposed amendments to the regulation
will add the items that the law requires the advisory committee to assess to
the regulation. The advisory committee is currently working on completing the
scientific risk assessment process for plants to be proposed for listing as
noxious weeds.

Issues: Aligning the language of the regulation with the
Code of Virginia and clarifying existing provisions make the regulation easier
to understand and interpret. Additionally, the proposed changes allow for more
flexibility in enforcement, which will benefit the agency and the public. There
are no disadvantages to the public or the Commonwealth.

Department of Planning and Budget's Economic Impact Analysis:

Summary of the Proposed Amendments to Regulation. The Board of
Agriculture and Consumer Services (Board) proposes to amend this regulation to
conform to Chapter 171 of the 2016 Acts of Assembly (Chapter 171)1
concerning the designation of plants as noxious weeds.

Result of Analysis. The benefits likely exceed the costs for
all proposed changes.

Estimated Economic Impact. Prior to the 2016 Session of the
General Assembly, the Noxious Weeds Law2 defined "noxious
weed" as "any living plant, not widely disseminated, or part thereof,
declared by the Board through regulations under this chapter, to be detrimental
to crops, surface waters, including lakes, or other desirable plants,
livestock, land, or other property, or to be injurious to public health." Chapter
171 of the 2016 Acts of Assembly (Chapter 171) amended the definition of
"noxious weed" by removing the "not widely disseminated"
condition and excluding from eligibility for declaration as a noxious weed
those living plants or parts thereof for which in-state production is
commercially viable or that are commercially propagated in Virginia. In
response to the new statutory definition for "noxious weed," the
Board proposes to amend the definitions for "Tier 1 noxious weed" and
"Tier 2 noxious weed" in the regulation. The Board also proposes to
move two weeds from Tier 1 to Tier 2 as a result of the change in definitions.
Under the new definition, Tier 1 noxious weeds are those noxious weeds not
known to be present in the Commonwealth; therefore, the Board proposes to move
beach vitex and wavyleaf basketgrass, which are in Virginia, from Tier 1 to
Tier 2, which is defined as any noxious weed that is present in the
Commonwealth and for which successful eradication or suppression is feasible.

Section 80 of the current regulation3 states that
"The commissioner may conduct eradication or suppression activities to
prevent the dissemination of a Tier 14 noxious weed. Eradication or
suppression activities may include, but are not limited to, the following: destruction,
seizure, stop sale, stop delivery, treatment, or ordering the regulated article
to be returned to its point of origin." The Board proposes to amend
"Tier 1" to "Tier 1 or Tier 2." Thus, this proposed
amendment would keep beach vitex and wavyleaf basketgrass among the plants that
could be subject to eradication or suppression activities. Effectively, this
would also newly allow eradication or suppression activities of the plants that
are currently in Tier 2 and would remain in Tier 2 under the proposed
regulation. Those plants are cogon grass, purple loosestrife, and water
spinach. The Department of Agriculture and Consumer Services (Department) does
not anticipate that this change will affect eradication or suppression
activities for those three plants in practice, as these activities are
dependent on funding. The Department believes that if funding is made available
it is likely that the funds would only be used to eradicate Tier 1 noxious
weeds.

To address the concerns that nurseries and landscapers
expressed regarding their ability to continue selling commercially viable
plants already in the trade, Chapter 171 also added the following requirement
to Code of Virginia section § 3.2-802 of the Noxious Weeds Law, which
establishes the Board's authority to declare a weed noxious: "Prior to
designating a living plant or part thereof as a noxious weed, the Board shall
review the recommendations of an advisory committee established by the
Commissioner to conduct a scientific risk assessment of the proposed plant. The
assessment shall include the degree to which the plant is detrimental to crops;
surface water, including lakes; other desirable plants; livestock; land or
other property; public health; the environment; and the economy. The advisory
committee shall also include in its recommendations to the Board an analysis of
the current and potential in-state commercial viability of the specific plant
species and the economic impact on industries affected by the designation of
the plant as a noxious weed." There already exists a Noxious Weeds
Advisory Committee for the purpose of assisting the Department in the
evaluation and risk-assessment of plants that may be declared noxious weeds.
The Board proposes to add the items described above in the legislation to what
should be considered by the committee.

Thus the proposals to: 1) amend the definitions of "Tier 1
noxious weed" and "Tier 2 noxious weed", 2) move beach vitex and
wavyleaf basketgrass from Tier 1 to Tier 2, 3) add Tier 2 to those noxious
weeds upon which the commissioner may conduct eradication or suppression
activities, and 4) add items to be considered when deciding whether a plant is
to be designated a noxious weed, will clarify what is effectively required by
statute and effectively newly allow eradication or suppression of cogon grass,
purple loosestrife, and water spinach. The clarification and avoiding
inconsistency with the Code of Virginia is beneficial in that it reduces
potential confusion and unintentional actions that may violate the law. As
discussed above, the effectively newly allowing eradication or suppression of
cogon grass, purple loosestrife, and water spinach will likely have no impact,
but does add flexibility.

Businesses and Entities Affected. The proposed amendments will
not likely have a large impact on any businesses or other entities. The subject
matter concerns nurseries, landscapers, farmers, agribusinesses, various
landowners including local governments, conservation organizations, soil and
water conservation districts, and weed management businesses and cooperatives.

Projected Impact on Employment. The proposed amendments do not
significantly affect employment.

Effects on the Use and Value of Private Property. The proposed
amendments do not significantly affect the use and value of private property.

Real Estate Development Costs. The proposed amendments do not
significantly affect real estate development costs.

Small Businesses:

Definition. Pursuant to § 2.2-4007.04 of the Code of Virginia,
small business is defined as "a business entity, including its affiliates,
that (i) is independently owned and operated and (ii) employs fewer than 500
full-time employees or has gross annual sales of less than $6 million."

Costs and Other Effects. The proposed amendments do not
significantly affect costs for small businesses.

Alternative Method that Minimizes Adverse Impact. The proposed
amendments do not adversely affect small businesses.

Adverse Impacts:

Businesses. The proposed amendments do not adversely affect
businesses.

Localities. The proposed amendments do not adversely affect
localities.

Other Entities. The proposed amendments do not adversely affect
other entities.

Agency's Response to Economic Impact Analysis: The
agency concurs with the analysis of the Department of Planning and Budget.

Summary:

The amendments align the regulation with Chapter 171 of the
2016 Acts of Assembly regarding the designation of plants as noxious weeds and
clarify existing regulatory language.

2VAC5-317-10. Definitions.

The following words and terms shall have the following
meanings unless the context clearly indicates otherwise:

"Board" means the Virginia Board of Agriculture and
Consumer Services.

"Business day" means a day that is not a Saturday,
Sunday, or legal holiday, or a day on which state government offices are
closed.

"Certificate" means a document issued by an
inspector or by a person operating in accordance with a compliance agreement to
allow the movement of regulated articles to any destinationor
authorized by the commissioner indicating that a regulated article is not
contaminated with a noxious weed.

"Commissioner" means the Commissioner of the
Virginia Department of Agriculture and Consumer Services.

"Compliance agreement" means a written agreement
between a person engaged in handling, receiving, or moving regulated articles
and the Virginia Department of Agriculture and Consumer Services or the United
StatesU.S. Department of Agriculture, or both, wherein the former
agrees to fulfill the requirements of the compliance agreement and comply with
the provisions of this chapter.

"Consignee" means any person to whom any regulated
article is shipped for handling, sale, resale, or any other purpose.

"Department" means the Virginia Department of
Agriculture and Consumer Services.

"Infested" or "infestation" means the
presence of a listed noxious weed or the existence of circumstances that make
it reasonable to believe that life stages of a listed noxious weed are present.

"Inspector" means an employee of the Virginia
Department of Agriculture and Consumer Services or other person authorized by
the Commissioner of the Virginia Department of Agriculture and Consumer
Services to enforce the provisions of this chapter.

"Limited permit" means a document issued by an
inspector to allow the movement of regulated articles to a specific
destination.

"Listed noxious weed" means any plant listed in
this chapter as either a Tier 1 or, Tier 2, or Tier 3
noxious weed.

"Move," "moved," or
"movement" means shipped, offered for shipment, received for
transportation, transported, carried, or allowed to be moved, shipped,
transported, or carriedto ship, offer for shipment, receive for
transportation, carry, or otherwise transport, move, or allow to be moved.

"Noxious weed" means the term as defined in
§ 3.2-800 of the Code of Virginia.

"Noxious Weeds Law" means the statute set forth in
Chapter 8 (§ 3.2-800 et seq.) of Title 3.2 of the Code of Virginia.

"Permit" means a document issued by the
commissioner to provide for movement of regulated articles to restricted destinations
for limited handling, utilization, processing, or scientific purposes.

"Person" means the term as defined in § 1-230
of the Code of Virginia.

"Regulated article" means any listed noxious weed
or any article or means of conveyance known to be infested or determined by
an inspector to present a risk of spreading a listed noxious weedcarrying
or capable of carrying a listed noxious weed.

"Tier 1 noxious weed" means any noxious weed that
is not native toknown to be present in the Commonwealth that (i)
has no known populations present in the Commonwealth or (ii) is not widely
disseminated in the Commonwealth and for which successful eradication or
suppression is likely.

"Tier 2 noxious weed" means any noxious weed that (i)
is not native tois present in the Commonwealth, (ii) is not
widely disseminated in the Commonwealth, and (iii)and for which
successful eradication or suppression is feasible but eradication is
unlikely.

"Tier 3 noxious weed" means any noxious weed
that is present in the Commonwealth and not listed as a Tier 1 or Tier 2
noxious weed.

"Waybill" means a document containing the details
of a shipment of goods.

The movement of a regulated article is prohibited unless
accompanied by a valid certificate or limited permit.

2VAC5-317-40. Issuance and cancellation of certificates and limited
permits.

A. A certificate or a limited permit may be issued by an
inspectorthe commissioner for the movement of a regulated article
into, within, or out of the Commonwealth when the regulated article meets the
following three conditions:

1. The regulated article is to be moved:

a. Intrastate toTo a specified destination
under conditions that specify the limited handling, utilization, processing, or
treatment of the article when the inspectorcommissioner
determines that such movement will not result in the spread of the noxious
weed; or

b. By a state or federal agency, or person authorized by the
department, for experimental or scientific purposes;

2. The regulated article is to be moved in compliance with all
additional conditions deemed necessary under the Noxious Weeds Law to prevent
the spread of the noxious weed; and

3. The regulated article is eligible for unrestricted
movement under all other domestic plant quarantines and regulations applicable
to the regulated article.

B. Any certificate or limited permit that has been
issued or authorized may be withdrawn by the inspectorcommissioner
orally or in writing if the inspectorcommissioner determines
that the holder of the certificate or limited permit has not complied
with all conditions for the use of the certificate or limited permit,
or with any applicable compliance agreement. If the withdrawal is oral, the
withdrawal and the reasons for the withdrawal shall be confirmed in writing and
communicated to the certificate or limited permit holder as promptly as
circumstances allow.

2VAC5-317-50. Assembly and inspection of regulated articles.

A. Any person who desires to move a regulated article and who
is required to have a limited permit for such movement shall apply for a
limited permit as far in advance as practical but no fewer than five
business days before the regulated article is to be moved.

B. The regulated article must be assembled at the place and
in the manner the inspector designates as necessary to facilitate inspection
and shall be safeguarded to prevent infestation.

2VAC5-317-60. Attachment and disposition of certificates and limited
permits.

A. A certificate or limited permit required for the
movement of a regulated article into, within, or out of the Commonwealth must
be attached at all times during the intrastate movement to the outside
of the container that contains the regulated article or to the regulated
article itself. The requirements of this section may also be met by attaching
the certificate or limited permit to the consignee's copy of the
waybill, provided the regulated article is sufficiently described on the
certificate or limited permit and on the waybill to facilitate the
identification of the regulated article.

B. The certificate or limited permit for the intrastate
movement of a regulated article must be furnished by the carrier to the
consignee at the destination of the regulated article. A copy of the
certificate or the limited permit must be retained by the sender of the
regulated article at the place of shipment.

The commissioner may conduct eradication or suppression
activities to prevent the dissemination of a Tier 1 or Tier 2 noxious
weed. Eradication or suppression activities may include, but are not limited
to, the following: destruction, seizure, stop sale, stop delivery,
treatment, or ordering the regulated article to be returned to its point of
origin.

2VAC5-317-100. Noxious Weeds Advisory Committee.

A. The commissioner shall establish a Noxious Weeds Advisory
Committee for the purpose of assisting the department in the evaluation and
risk-assessment of plants that may be declared noxious weeds in 2VAC5-317-20.
The committee may also consider the delisting of plants that were previously
declared noxious weeds.

B. The committee shall present recommendations to the
commissioner regarding the listing or delisting of plants as noxious weeds. The
committee shall consider the protection of Virginia's natural resources and
the environment, as well as the economic impact on nurseries, landscapers,
agricultural producers, and other affected industries in the formulation of its
recommendationsdegree to which the plant is detrimental to crops;
surface waters, including lakes; other desirable plants; livestock; land or
other property; public health; the environment; and the economy. The
committee's recommendation shall include an analysis of the current and
potential in-state commercial viability of the specific plant species and the
economic impact on industries affected by the designation of the plant as a
noxious weed.

C. The commissioner shall convene a meeting of the committee
at least once annually, and may convene additional meetings at his discretion.
Department staff will coordinate the scheduling and logistics of the meetings,
including the posting of meeting notices on the Virginia Regulatory Town
Hall and the Commonwealth Calendar.

D. Committee members shall serve at the invitation of the
commissioner. For every meeting of the committee, the commissioner shall invite
representatives of Virginia's agricultural, horticultural, and environmental
industries as well as representatives of Virginia's land grant universities and
relevant executive branch agencies, to include but not be limited to:

1. A conservation representative or organization,;

2. An agribusiness representative or organization,;

3. A local government representative or organization,;

4. Virginia Cooperative Extension,;

5. Virginia Department of Conservation and Recreation,;

6. Virginia Department of Forestry,;

7. Virginia Department of Game and Inland Fisheries,;

8. Virginia Department of Transportation,;

9. A farming representative or organization,;

10. A forage-based agriculture representative or organization,;

11. A native plant conservation representative or organization,;

12. A nursery and landscaping representative or organization,;

13. Virginia Polytechnic Institute and State University,
and;

14. Virginia State University;

15. A cooperative weed management area representative or
organization; and

16. Virginia soil and water conservation districts.

E. The commissioner may invite representatives of local
government agencies from localities where a plant of concern has been found or
from localities that could be impacted by the declaration of a plant as a
noxious weed. The commissioner may invite representatives of other
organizations not listed in subsection D of this section that may have a direct
interest in the declaration of a plant as a noxious weed.

F. Prior to each meeting of the committee, the commissioner
or his designee shall make timely notification to committee members of any
plant that the department is considering for possible listing or delisting as a
noxious weed. The notification will include the scientific data and rationale
for such listing or delisting. The commissioner or his designee shall survey
committee members to determine if any member has identified a plant that should
be considered for possible listing or delisting as a noxious weed. Any
committee member who has identified a plant that should be considered for
possible listing or delisting as a noxious weed shall provide department staff
with relevant scientific data and the rationale to support the listing or
delisting of the plant. The commissioner or his designee will distribute the
scientific data and rationale to other committee members for their review and
consideration prior to the meeting of the committee.

G. The committee, by majority vote of members, may develop
and present to the commissioner a list of plants recommended for listing or
delisting as noxious weeds.

H. The commissioner shall consider the recommendations of the
committee in his preparation of the list of plants that he presents to the
board for listing or delisting as noxious weeds.

I. If a regulatory action to list or delist a noxious weed is
under way, the commissioner may delay the pursuit of a new regulatory action to
list or delist a new noxious weed until the current action is completed.

VA.R. Doc. No. R18-5122; Filed September 18, 2017, 4:36 p.m.

TITLE 4. CONSERVATION AND NATURAL RESOURCES

MARINE RESOURCES COMMISSION

Emergency Regulation

Title of Regulation: 4VAC20-260. Pertaining to
Designation of Seed Areas and Clean Cull Areas (amending 4VAC20-260-50).

Statutory Authority: §§ 28.2-201 and 28.2-210 of the
Code of Virginia.

The amendments establish inspection procedures for oysters
kept in individual baskets and clarifies the methods police officers may use to
inspect oyster harvests for conformity to culling standards.

4VAC20-260-50. Culling and inspection procedures.

A. All oysters taken from natural public beds, rocks, or
shoals shall be placed on the culling board, or in only one basket upon the
culling board, and culled by hand at the location of harvest.

1. Culled oysters shall be transferred immediately from the
culling board to either the inside open part of the boat,and stored
in either a loose pile, or baskets, but only one transfer method
may be used on any boat or vessel in any one day.

a. Oysters shall not be stored in both a loose pile and in
baskets.

b. A single basket may be on board any boat during transfer of
culled oysters from the culling board to the inside open part of the boat in a
loose pile.

2. The entire harvest shall be subject to inspection, as
provided in subsection F of this section.

B. Any oysters taken lawfully by hand from natural public beds,
rocks, or shoals from the seaside of the Eastern Shore, and held in sacks,
bags, or containers, shall be culled when taken and placed in those sacks,
bags, or containers for inspection by any police officer as described in
subsection G of this section.

C. If oysters from leased grounds and oysters from public
grounds are mixed in the same cargo on a boat or motor vehicle, the entire
cargo shall be subject to inspection under this chapter.

D. It shall be unlawful for any person to buy, sell, or
report clean cull oysters by any measure other than those described in
§ 28.2-526 A of the Code of Virginia filled to level full. The container
described in § 28.2-526 A 2 is a basket. It shall be unlawful for any person to
sell, purchase, or report the sale or purchase of any clean cull oysters
harvested from public grounds, as described in 4VAC20-720-40, in excess of the
harvest limits described in 4VAC20-720-80.

E. It shall be unlawful for any person to buy, sell, or
report seed oysters by any measure other than as described in § 28.2-526
of the Code of Virginia.

F. Oysters may be inspected by any police officer according
to any one of the following provisions:

1. For any oysters transferred from the culling board to
the inside open part of the boat, vehicle, or trailer orstored in a
loose pile in a vehicle, a trailer, or the inside open part of a boat, anythe police officer mayshall use a shovel to take at
least one bushel or basket of oysters to inspect, at random,
provided that the entire bushel or basket shall be taken from one place in the
open pile of oysters. The officer may inspect multiple bushels or baskets by
repeating this procedure for each bushel or basket of oysters shoveled from the
loose pile.

2. For any oysters transferred from a vessel to a motor
vehicle or trailer, anystored in baskets in a vehicle, a trailer, or
the inside open part of a boat, the police officer mayshall
select one or more baskets of oystersbasket and empty the
contents of those basketsthat basket into a bushel or basket,
as described in § 28.2-526 of the Code of Virginia, or a basket for
inspection. The officer may inspect multiple baskets by repeating this
procedure for each basket.

G. In the inspection of oysters harvested by hand from waters
of the seaside of the Eastern Shore, the police officer may select any sacks,
bags, or containers at random to establish a full metallic measuring bushel or
basket for purposes of inspection.

H. On the seaside of the Eastern Shore oysters may be sold
without being measured if both the buyer and the seller agree to the number of
bushels of oysters in the transaction.

VA.R. Doc. No. R18-5295; Filed September 26, 2017, 4:07 p.m.

TITLE 4. CONSERVATION AND NATURAL RESOURCES

MARINE RESOURCES COMMISSION

Emergency Regulation

Title of Regulation: 4VAC20-510. Pertaining to
Amberjack and Cobia (amending 4VAC20-510-25).

Statutory Authority: §§ 28.2-201 and 28.2-210 of the
Code of Virginia.

A. It shall be unlawful for any person fishing
commercially to possess more than two amberjack or more than two cobia at any
time, except as described in 4VAC20-510-33. Any amberjack or cobia caught after
the possession limit has been reached shall be returned to the water
immediately. When fishing from any boat or vessel where the entire catch is
held in a common hold or container, the possession limit shall be for the boat
or vessel and shall be equal to the number of persons on board legally eligible
to fish multiplied by two. The captain or operator of the boat or vessel shall
be responsible for any boat or vessel possession limit.

B. In 2017 it shall be unlawful for any person,
fishing commercially, to harvest or possess any cobia after September 30.

VA.R. Doc. No. R18-5294; Filed September 26, 2017, 3:55 p.m.

TITLE 4. CONSERVATION AND NATURAL RESOURCES

MARINE RESOURCES COMMISSION

Emergency Regulation

Title of Regulation: 4VAC20-620. Pertaining to Summer
Flounder (amending 4VAC20-620-40).

Statutory Authority: §§ 28.2-201 and 28.2-210 of the
Code of Virginia.

The amendments modify the landing period and trip limit for
summer flounder harvested commercially from offshore and landed in Virginia.

4VAC20-620-40. Commercial vessel possession and landing
limitations.

A. It shall be unlawful for any person harvesting summer
flounder outside of Virginia's waters to do any of the following, except as
described in subsections B, C, D, and E of this section:

1. Possess aboard any vessel in Virginia waters any amount of
summer flounder in excess of 10% by weight of Atlantic croaker or the combined
landings, on board a vessel, of black sea bass, scup, squid, scallops and
Atlantic mackerel.

2. Possess aboard any vessel in Virginia waters any amount of
summer flounder in excess of 1,500 pounds landed in combination with Atlantic
croaker.

3. Fail to sell the vessel's entire harvest of all species at
the point of landing.

B. Nothing in this chapter shall preclude a vessel from
possessing any North Carolina vessel possession limit of summer flounder in
Virginia; however, no vessel that possesses the North Carolina vessel
possession limit of summer flounder shall offload any amount of that possession
limit, except as described in subsection J of this section.

C. From March 1 through April 30, it shall be unlawful for
any person harvesting summer flounder outside of Virginia waters to do any of
the following:

1. Possess aboard any vessel in Virginia waters any amount of
summer flounder in excess of the combined total of the Virginia landing limit
described in subdivision 2 of this subsection and the amount of the legal North
Carolina landing limit or trip limit.

2. Land in Virginia more than a total of 7,500 pounds of
summer flounder.

3. Land in Virginia any amount of summer flounder more than
once in any consecutive five-day period.

D. From November 1October 16 through December
31 of each year, if it has not been announced that 85% of the allowable
landings have been taken, it shall be unlawful for any person harvesting summer
flounder outside of Virginia waters to do any of the following:

1. Possess aboard any vessel in Virginia waters any amount of
summer flounder in excess of the combined total of the Virginia landing limit
described in subdivision 2 of this subsection and the amount of the legal North
Carolina landing limit or trip limit.

2. Land in Virginia more than a total of 7,5007,000
pounds of summer flounder.

3. Land in Virginia any amount of summer flounder more than
once in any consecutive five-day period.

E. From January 1 through December 31 of each year, any boat
or vessel issued a valid federal summer flounder moratorium permit and owned
and operated by a legal Virginia Commercial Hook-and-Line Licensee that
possesses a Restricted Summer Flounder Endorsement shall be restricted to a
possession and landing limit of 200 pounds of summer flounder, except as
described in 4VAC20-620-30 F.

F. Upon request by a marine police officer, the seafood buyer
or processor shall offload and accurately determine the total weight of all
summer flounder aboard any vessel landing summer flounder in Virginia.

G. Any possession limit described in this section shall be
determined by the weight in pounds of summer flounder as customarily packed,
boxed and weighed by the seafood buyer or processor. The weight of any summer
flounder in pounds found in excess of any possession limit described in this
section shall be prima facie evidence of violation of this chapter. Persons in
possession of summer flounder aboard any vessel in excess of the possession
limit shall be in violation of this chapter unless that vessel has requested
and been granted safe harbor. Any buyer or processor offloading or accepting
any quantity of summer flounder from any vessel in excess of the possession
limit shall be in violation of this chapter, except as described by subsection
J of this section. A buyer or processor may accept or buy summer flounder from
a vessel that has secured safe harbor, provided that vessel has satisfied the
requirements described in subsection J of this section.

H. If a person violates the possession limits described in
this section, the entire amount of summer flounder in that person's possession
shall be confiscated. Any confiscated summer flounder shall be considered as a
removal from the appropriate commercial harvest or landings quota. Upon
confiscation, the marine police officer shall inventory the confiscated summer
flounder and, at a minimum, secure two bids for purchase of the confiscated
summer flounder from approved and licensed seafood buyers. The confiscated fish
will be sold to the highest bidder and all funds derived from such sale shall
be deposited for the Commonwealth pending court resolution of the charge of
violating the possession limits established by this chapter. All of the
collected funds will be returned to the accused upon a finding of innocence or
forfeited to the Commonwealth upon a finding of guilty.

I. It shall be unlawful for a licensed seafood buyer or
federally permitted seafood buyer to fail to contact the Marine Resources
Commission Operation Station prior to a vessel offloading summer flounder
harvested outside of Virginia. The buyer shall provide to the Marine Resources
Commission the name of the vessel, its captain, an estimate of the amount in
pounds of summer flounder on board that vessel, and the anticipated or
approximate offloading time. Once offloading of any vessel is complete and the
weight of the landed summer flounder has been determined, the buyer shall contact
the Marine Resources Commission Operations Station and report the vessel name
and corresponding weight of summer flounder landed. It shall be unlawful for
any person to offload from a boat or vessel for commercial purposes any summer
flounder during the period of 9 p.m. to 7 a.m.

J. Any boat or vessel that has entered Virginia waters for
safe harbor shall only offload summer flounder when the state that licenses
that vessel requests to transfer quota to Virginia, in the amount that
corresponds to that vessel's possession limit, and the commissioner agrees to
accept that transfer of quota.

K. After any commercial harvest or landing quota as described
in 4VAC20-620-30 has been attained and announced as such, any boat or vessel
possessing summer flounder on board may enter Virginia waters for safe harbor
but shall contact the Marine Resources Commission Operation Center in advance
of such entry into Virginia waters.

L. When it is projected and announced that 85% of the
allowable landings have been taken, it shall be unlawful to land summer
flounder in Virginia, except as described in subsection A of this section.

M. It shall be unlawful for any person harvesting summer
flounder outside of Virginia waters to possess aboard any vessel, in Virginia,
any amount of summer flounder, once it has been projected and announced that
100% of the quota described in 4VAC20-620-30 A has been taken.

VA.R. Doc. No. R18-5293; Filed September 27, 2017, 10:33 a.m.

TITLE 6. CRIMINAL JUSTICE AND CORRECTIONS

FORENSIC SCIENCE BOARD

Fast-Track Regulation

Title of Regulation: 6VAC40-11. Public Participation
Guidelines (amending 6VAC40-11-50).

Statutory Authority: §§ 2.2-4007.02 and 9.1-1110 of the
Code of Virginia.

Basis: Section 2.2-4007.02 of the Administrative Process
Act mandates that each agency develop, adopt, and use public participation
guidelines for soliciting the input of interested parties in the formation and
development of its regulations. The Forensic Science Board is the promulgating
entity, having been granted regulatory power under § 9.1-1110 of the Code of
Virginia.

Purpose: The proposed change is to conform the agency's
public participation guidelines to the change in the Administrative Process Act
enacted by Chapter 795 of the 2012 Acts of the Assembly. Participation by the
public in the regulatory process is essential to assist the Forensic Science
Board in the promulgation of regulations that will protect the public health
and safety.

Rationale for Using Fast-Track Rulemaking Process: As
the proposed change merely conforms the regulation to the underlying statute, §
2.2-4007.02 B of the Code of Virginia, the rulemaking is not expected to be
controversial and is, therefore, appropriate for the fast-track rulemaking
process.

Substance: The proposed change conforms the agency's
public participation guidelines to the current language in the Administrative
Process Act, Chapter 795 of the 2012 Acts of the Assembly.

Issues: As the proposed change merely conforms the
regulation to the underlying statute, the primary advantage is to ensure
consistency between the regulation and the law to reduce any confusion. There
are no anticipated disadvantages to the public or the Commonwealth.

Department of Planning and Budget's Economic Impact
Analysis:

Summary of the Proposed Amendments to Regulation. Pursuant to
Chapter 795 of the 2012 Acts of Assembly,1 the Forensic Science
Board (Board) proposes to specify in this regulation that interested persons
shall be afforded an opportunity to be accompanied by and represented by
counsel or other representative when submitting data, views, and arguments,
either orally or in writing, to the agency.

Result of Analysis. The benefits likely exceed the costs for
all proposed changes.

Estimated Economic Impact. The current Public Participation
Guidelines state that: "In considering any nonemergency, nonexempt
regulatory action, the agency shall afford interested persons an opportunity to
submit data, views, and arguments, either orally or in writing, to the
agency." The Board proposes to append "and (ii) be accompanied by and
represented by counsel or other representative."

Chapter 795 of the 2012 Acts of Assembly added to the Code of
Virginia § 2.2-4007.02. "Public participation guidelines" that
interested persons also be afforded an opportunity to be accompanied by and
represented by counsel or other representative. Since the Code of Virginia
already specifies that interested persons shall be afforded an opportunity to
be accompanied by and represented by counsel or other representative, the
Board’s proposal to add this language to the regulation will not change the law
in effect, but will be beneficial in that it will inform interested parties who
read this regulation but not the statute of their legal rights concerning
representation.

Projected Impact on Employment. The proposed amendment does not
significantly affect employment.

Effects on the Use and Value of Private Property. The proposed
amendment does not affect the use and value of private property.

Real Estate Development Costs. The proposed amendment does not
affect real estate development costs.

Small Businesses:

Definition. Pursuant to § 2.2-4007.04 of the Code of Virginia,
small business is defined as "a business entity, including its affiliates,
that (i) is independently owned and operated and (ii) employs fewer than 500
full-time employees or has gross annual sales of less than $6 million."

Costs and Other Effects. The proposed amendment does not affect
costs for small businesses.

Alternative Method that Minimizes Adverse Impact. The proposed
amendment does not adversely affect small businesses.

Adverse Impacts:

Businesses. The proposed amendment does not adversely affect
businesses.

Localities. The proposed amendment does not adversely affect
localities.

Other Entities. The proposed amendment does not adversely
affect other entities.

Agency's Response to Economic Impact Analysis: The
agency has no comment on the economic impact analysis.

Summary:

Pursuant to § 2.2-4007.02 of the Code of
Virginia, the amendment provides that interested persons submitting data,
views, and arguments on a regulatory action may be accompanied by and
represented by counsel or another representative.

Part III
Public Participation Procedures

6VAC40-11-50. Public comment.

A. In considering any nonemergency, nonexempt regulatory
action, the agency shall afford interested persons an opportunity to (i)
submit data, views, and arguments, either orally or in writing, to the agency;
and (ii) be accompanied by and represented by counsel or other representative.
Such opportunity to comment shall include an online public comment forum on the
Town Hall.

1. To any requesting person, the agency shall provide copies
of the statement of basis, purpose, substance, and issues; the economic impact
analysis of the proposed or fast-track regulatory action; and the agency's
response to public comments received.

2. The agency may begin crafting a regulatory action prior to
or during any opportunities it provides to the public to submit comments.

B. The agency shall accept public comments in writing after
the publication of a regulatory action in the Virginia Register as follows:

1. For a minimum of 30 calendar days following the publication
of the notice of intended regulatory action (NOIRA).

2. For a minimum of 60 calendar days following the publication
of a proposed regulation.

3. For a minimum of 30 calendar days following the publication
of a reproposed regulation.

4. For a minimum of 30 calendar days following the publication
of a final adopted regulation.

5. For a minimum of 30 calendar days following the publication
of a fast-track regulation.

6. For a minimum of 21 calendar days following the publication
of a notice of periodic review.

7. Not later than 21 calendar days following the publication
of a petition for rulemaking.

C. The agency may determine if any of the comment periods
listed in subsection B of this section shall be extended.

D. If the Governor finds that one or more changes with
substantial impact have been made to a proposed regulation, he may require the
agency to provide an additional 30 calendar days to solicit additional public
comment on the changes in accordance with § 2.2-4013 C of the Code of
Virginia.

E. The agency shall send a draft of the agency's summary
description of public comment to all public commenters on the proposed
regulation at least five days before final adoption of the regulation pursuant
to § 2.2-4012 E of the Code of Virginia.

VA.R. Doc. No. R18-5147; Filed September 26, 2017, 11:37 a.m.

TITLE 21. SECURITIES AND RETAIL FRANCHISING

STATE CORPORATION COMMISSION

Proposed Regulation

REGISTRAR'S NOTICE: The
State Corporation Commission is claiming an exemption from the Administrative
Process Act in accordance with § 2.2-4002 A 2 of the Code of Virginia,
which exempts courts, any agency of the Supreme Court, and any agency that by
the Constitution is expressly granted any of the powers of a court of record.

The proposed regulatory action pertains to the
administration and enforcement of the Virginia Securities Act and affects
several regulatory chapters. Proposed amendments to 21VAC5-20, Broker-dealers,
Broker-dealer Agents and Agents of the Issuer, and 21VAC5-80, Investment
Advisors, increase the registration and annual renewal filing fee to $40 for
broker-dealer agents, agents of the issuer, and investment advisor
representatives. Proposed amendments to 21VAC5-30, Securities Registration,
update the Oil and Gas Programs statements of policy and add four statements of
policy of the North American Securities Administrators Association, as follows:
Promotional Shares, Loans & Other Material Transactions, Impoundment of
Proceeds, and Electronic Offering Documents and Electronic Signatures. The
proposed action repeals the section of 21VAC5-40, Exempt Securities and
Transactions, regarding the Regulation D, Rule 505 exemption due to the repeal
of Rule 505 by the U.S. Securities and Exchange Commission (SEC) in October
2016. A new section is proposed in 21VAC5-45, Federal Covered Securities, to
establish a notice filing requirement for issuers conducting a federal
crowdfunding securities offering. In May of 2016, the SEC adopted the final
rules for federal crowdfunding that preempted the requirement of the
registration of these offerings. However, a state that is home to the principal
place of business of the issuer or in which residents have purchased 50% or
more of the offering amount may require a notice filing that contains all
documents filed with the SEC together with a consent to service of process.

AT RICHMOND, SEPTEMBER 26, 2017

COMMONWEALTH OF VIRGINIA, ex rel.

STATE CORPORATION COMMISSION

CASE NO. SEC-2017-00034

Ex Parte: In the matter of
Adopting a Revision to the Rules
Governing the Virginia Securities Act

ORDER TO TAKE NOTICE

Section 12.1-13 of the Code of Virginia ("Code")
provides that the State Corporation Commission ("Commission") shall
have the power to promulgate rules and regulations in the enforcement and
administration of all laws within its jurisdiction. Section 13.1-523 of the
Virginia Securities Act ("Act"), § 13.1-501 et seq. of the Code
provides that the Commission may issue any rules and regulations necessary or
appropriate for the administration and enforcement of the Act.

The rules and regulations issued by the Commission pursuant
to the Act are set forth in Title 21 of the Virginia Administrative Code. A
copy also may be found at the Commission's website:
http://www.scc.virginia.gov/case.

Proposed Revision to Chapter 20. Registration and Renewal
Filing Fees for Agents: The proposed amendment to Chapter 20 provides for an
increase in the registration and annual renewal filing fee for broker-dealer
agents (including Canadian agents) and agents of the issuer from $30 to $40.
The fee has not been raised since it was adopted by rule in 1981. From that
time to the present, the number and complexity of audits of these registrants'
offices has increased, necessitating the increase in the registration fee. The
Division of Securities and Retail Franchising ("Division") will apply
the additional fees towards the cost to conduct audits.

Proposed Revision to Chapter 30. Adoption of Statements of
Policy: The Division is a member of the North American Securities
Administrators Association ("NASAA"), a trade association of state
regulators. As a member of NASAA, the Division participates in a nationwide
effort to use a uniform approach to the review of offerings registered in the
states. From time to time, NASAA revises and adds to the list of standard
policies applicable to certain offerings. The Division is updating and revising
its list of these statements to add four additional items: Promotional Shares,
Loans and Other Material Transactions, Impoundment of Proceeds, and Electronic
Offering Documents and Electronic Signatures. The last item, Electronic
Offering Documents and Electronic Signatures, will allow issuers to move away
from providing investors with large cumbersome prospectuses and provide for the
electronic delivery and signatures.

Proposed Revision to Chapter 40. Repeal of Regulation D, Rule
505: In 1983, the Division adopted by rule (as amended) an exemption
promulgated by the United States Securities and Exchange Commission
("SEC") known as Regulation D that provided for an exemption for
offerings of up to $5 million of securities in any 12-month period to an
unlimited number of accredited investors and up to 35 non-accredited but
sophisticated investors, as long as non-accredited investors are provided
certain prescribed information about the issuer and the securities. Regulation
D, Rule 505 of Section 3(a)(11) of the Securities Act of 1933 ("1933
Act"), and Rule 147 thereunder provide an exemption from the 1933 Act
registration for offerings within a single state by issuers incorporated or
organized, having their principal office and doing business in such state. In October
2016, the SEC repealed Rule 505, making the companion subsection under the
current Commission regulations unnecessary. The Division proposes that the
section be repealed.

Revision to Chapter 45. Adoption of Federal Crowdfunding:
In 2015, the Division proposed an exemption from registration for certain
intrastate offerings known as crowdfunding. The Virginia Intrastate
Crowdfunding Exemption was adopted by the Commission in July 2015 under
Commission Rule 21VAC5-40-190. At the time that the Commission developed the
intrastate crowdfunding exemption, the SEC was working on a crowdfunding
proposal for interstate offerings. In May 2016, the SEC adopted the final rules
for federal crowdfunding. The final rule can be found at
https://www.sec.gov/rules/final/2015/33-9974.pdf.

When the SEC adopted the final rules governing interstate
crowdfunding, the states were preempted from requiring the registration of such
offerings. However, a state that is home to the principal place of business of
the issuer, or in which residents have purchased 50% or greater of the
aggregate offering amount, may require a notice filing that contains all
documents filed with the SEC together with a consent to service of process.

In order to facilitate that process, NASAA developed a model
notice filing so that the states could adopt the notice filing in a consistent
manner. This will allow interstate offerings to comply with the federal
crowdfunding rule and make the appropriate state notice filings.

The Division proposes that the Commission adopt the notice
filing requirement for federal crowdfunding offerings to include the Form U-CF
for notice filing.

Proposed Revision to Chapter 80. Registration and Renewal
Filing Fees for Investment Advisor Representatives: The proposed amendment to
Chapter 80 provides for an increase in the registration and annual renewal
filing fee for investment advisor representatives from $30 to $40. The fee has
not been raised since it was adopted by rule in 1981. From that time to the
present, the number and complexity of audits of these registrants' offices has
increased, necessitating the increase in the registration fee. The
Division will apply the additional fees to the cost to conduct audits.

The Division recommended to the Commission that the proposed
revisions should be considered for adoption. The Division also has recommended
to the Commission that a hearing should be held only if requested by those
interested parties who specifically indicate that a hearing is necessary and
the reasons therefore.

A copy of the proposed revisions may be requested by
interested parties from the Division by telephone, regular mail or email
request, and also can be found at the Division's website:
http://www.scc.virginia.gov/srf. Any comments to the proposed rules must be
received by November 1, 2017.

Accordingly, IT IS ORDERED THAT:

(1) The proposed revisions are appended hereto and made a
part of the record herein.

(2) On or before November 1, 2017, comments or request for
hearing on the proposed revisions must be submitted in writing to Joel H. Peck,
Clerk, State Corporation Commission, c/o Document Control Center, P.O. Box
2118, Richmond, Virginia 23218. Requests for hearing shall state why a hearing
is necessary and why the issues cannot be adequately addressed in written comments.
All correspondence shall reference Case No. SEC-2017-00034. Interested persons
desiring to submit comments electronically may do so by following the
instructions available at the Commission's website:
http://www.scc.virginia.gov/case.

(3) The proposed revisions shall be posted on the
Commission's website at http://www.scc.virginia.gov/case and on the Division's
website at http://www.scc.virginia.gov/srf. Interested persons also may request
a copy of the proposed revisions from the Division by telephone, mail, or
email.

AN ATTESTED COPY hereof, together with a copy of the proposed
revisions, shall be provided to the Registrar of Regulations for appropriate
publication in the Virginia Register of Regulations.

AN ATTESTED COPY hereof shall be sent to the Director of the
Division of Securities and Retail Franchising who shall forthwith provide
notice of this Order via U.S. mail or a copy of this Order may be sent by
e-mail to any interested persons as he may designate.

Part II
Broker-Dealer Agents

21VAC5-20-90. Application for registration as a broker-dealer
agent.

A. Application for registration as an agent of a FINRA member
shall be filed on and in compliance with all requirements of CRD and in full
compliance with the forms and regulations prescribed by the commission. The
application shall include all information required by such forms.

An application shall be deemed incomplete for registration as
a broker-dealer agent unless the applicant submits the following executed
forms, fee, and information:

1. Form U4.

2. The statutory fee made payable to FINRA in the amount of $30$40.

3. Evidence in the form of a FINRA exam report of passing
within the two-year period immediately preceding the date of the application:
(i) the Uniform Securities Agent State Law Examination, Series 63; (ii) the
Uniform Combined State Law Examination, Series 66; or (iii) a similar
examination in general use by securities administrators which, after reasonable
notice and subject to review by the commission, the Director of the Division of
Securities and Retail Franchising designates.

4. Any other information the commission may require.

B. Application for registration for non-FINRA member
broker-dealer agents shall be filed on and in compliance with all requirements
and forms prescribed by the commission.

An application shall be deemed incomplete for registration as
a broker-dealer agent unless the applicant submits the following executed
forms, fee, and information:

1. Form U4.

2. The statutory fee in the amount of $30$40.
The check must be made payable to the Treasurer of Virginia.

3. Evidence in the form of a FINRA exam report of passing
within the two-year period immediately preceding the date of the application:
(i) the Uniform Securities Agent State Law Examination, Series 63; (ii) the
Uniform Combined State Law Examination, Series 66; or (iii) a similar
examination in general use by securities administrators which, after reasonable
notice and subject to review by the commission, the Director of the Division of
Securities and Retail Franchising designates.

4. Any other information the commission may require.

C. The commission shall either grant or deny each application
for registration within 30 days after it is filed. However, if additional time
is needed to obtain or verify information regarding the application, the
commission may extend such period as much as 90 days by giving written notice
to the applicant. No more than three such extensions may be made by the
commission on any one application. An extension of the initial 30-day period,
not to exceed 90 days, shall be granted upon written request of the applicant.

21VAC5-20-110. Renewals.

A. To renew the registration or registrations of its
broker-dealer agent or agents, a FINRA member broker-dealer will be billed by
CRD the statutory fee of $30$40 per broker-dealer agent. A
renewal of registration or registrations shall be granted as a matter of course
upon payment of the proper fee or fees unless the registration was, or the
renewal would be, subject to revocation under § 13.1-506 of the Code of
Virginia.

B. A non-FINRA member broker-dealer shall file with the
commission at its Division of Securities and Retail Franchising the following
items at least 30 days prior to the expiration of registration.

1. Agents to be Renewed (Form S.D.4.A) accompanied by the
statutory fee of $30$40 for each agent whose registration
is to be renewed. The check must be made payable to the Treasurer of Virginia.

2. If applicable, Agents to be Canceled with clear records
(Form S.D.4.B).

3. If applicable, Agents to be Canceled without clear records
(Form S.D.4.C).

21VAC5-20-155. Limited Canadian broker-dealer agent
registration.

A. An agent of a Canadian broker-dealer who has no office or
other physical presence in the Commonwealth of Virginia may, provided the
broker-dealer agent is registered under this section, effect transactions in
securities as permitted for a broker-dealer registered under 21VAC5-20-85.

B. Application for registration as a broker-dealer agent
under this section shall be filed with the commission at its Division of
Securities and Retail Franchising or such other entity designated by the
commission on and in full compliance with forms prescribed by the commission
and shall include all information required by such forms.

C. An application for registration as a broker-dealer agent
under this section shall be deemed incomplete for purposes of applying for
registration unless the following executed forms, fee, and information are
submitted to the commission:

1. An application in the form required by the jurisdiction in
which the broker-dealer maintains its principal place of business.

2. Statutory fee payable to the Treasurer of Virginia in the
amount of $30$40 United States currency pursuant to
§ 13.1-505 G of the Act.

3. Evidence that the applicant is registered as a
broker-dealer agent in the jurisdiction from which it is effecting the
transactions.

4. Any other information the commission may require.

D. A broker-dealer agent registered under this section shall:

1. Maintain his provincial or territorial registration in good
standing;

2. Immediately notify the commission of any criminal action
taken against him or of any finding or sanction imposed on him as a result of
any self-regulatory or regulatory action involving fraud, theft, deceit,
misrepresentation or similar conduct.

E. A broker-dealer agent's registration under this section,
and any renewal thereof, shall expire annually at midnight on the 31st day of
December unless renewed in accordance with subsection F of this section.

F. To renew the registrations of its agents, a broker-dealer
registered under this section shall file with the commission at its division
the most recent renewal application, if any, filed in the jurisdiction in which
the broker-dealer maintains its principal place of business, or if no such
renewal application is required, the most recent application filed pursuant to
subdivision C 1 of this section along with the statutory fee in the amount of $30$40 United States currency pursuant to § 13.1-505 G of the Act.

G. A Canadian broker-dealer agent registered under this
section and acting in accordance with the limitations set out in this section
is exempt from all other rules applicable to a broker-dealer agent except the
anti-fraud provisions of the Act and the requirements set out in this section.

Part III
Agents of the Issuer

21VAC5-20-160. Application for registration as an agent of the
issuer.

A. Application for registration as an agent of the issuer
shall be filed on and in compliance with all requirements and forms prescribed
by the commission.

B. An application shall be deemed incomplete for registration
as an agent of the issuer unless the following executed forms, fee, and
information are submitted:

1. Form U4.

2. The statutory fee in the amount of $30$40.
The check must be made payable to the Treasurer of Virginia.

3. Evidence in the form of a FINRA exam report of passing
within the two-year period immediately preceding the date of the application:
(i) the Uniform Securities Agent State Law Examination, Series 63; (ii) the
Uniform Combined State Law Examination, Series 66; or (iii) a similar
examination in general use by securities administrators which, after reasonable
notice and subject to review by the commission, the Director of the Division of
Securities and Retail Franchising designates.

4. Any individual who meets the qualifications set forth in
subdivision B 3 of this section and has been registered in any state
jurisdiction requiring registration within the two-year period immediately
preceding the date of the filing of an application shall not be required to
comply with the examination requirement set forth in subdivision B 3 of this
section, except that the Director of Securities and Retail Franchising may
require additional examinations for any individual found to have violated any
federal or state securities laws.

5. Any other information the commission may require.

C. The commission shall either grant or deny each application
for registration within 30 days after it is filed. However, if additional time
is needed to obtain or verify information regarding the application, the
commission may extend such period as much as 90 days by giving written notice
to the applicant. No more than three such extensions may be made by the
commission on any one application. An extension of the initial 30-day period,
not to exceed 90 days, shall be granted upon written request of the applicant.

21VAC5-20-180. Renewals.

An issuer, on behalf of its agent or agents, shall file with
the commission at its Division of Securities and Retail Franchising at least 30
days prior to the expiration of registration a registration renewal form (Form
S.D.4) accompanied by the statutory fee of $30$40 for each agent
whose registration is to be renewed. The check must be made payable to the
Treasurer of Virginia.

The commission adopts the following NASAANorth
American Securities Administration Association, Inc. (NASAA) statements of
policy that shall apply to the registration of securities in the Commonwealth.
It will be considered a basis for denial of an application if an offering fails
to comply with an applicable statement of policy. While applications not
conforming to a statement of policy shall be looked upon with disfavor, where
good cause is shown, certain provisions may be modified or waived by the
commission.

A. Nothing in this exemption is intended to relieve, or
should be construed as in any way relieving, issuers or persons acting on their
behalf from providing disclosure to prospective investors adequate to satisfy
the anti-fraud provisions of the Act.

In view of the objective of this section and the purpose
and policies underlying the Act, this exemption is not available to an issuer
with respect to a transaction which, although in technical compliance with this
section, is part of a plan or scheme to evade registration or the conditions or
limitations explicitly stated in this section.

Nothing in this section is intended to exempt registered
broker-dealers or agents from the due diligence standards otherwise applicable
to such registered persons.

Nothing in this section is intended to exempt a person
from the broker-dealer or agent registration requirements of Article 3 (§
13.1-504 et seq.) of Chapter 5 of Title 13.1 of the Code of Virginia, except in
the case of an agent of the issuer who receives no sales commission directly or
indirectly for offering or selling the securities and who is not subject to
subdivision B 2 of this section.

B. For the purpose of the limited offering exemption
referred to in § 13.1-514 B 13 of the Act, the following securities are
determined to be exempt from the securities registration requirements of
Article 4 (§ 13.1-507 et seq.) of Chapter 5 of Title 13.1 of the Code of
Virginia.

Any securities offered or sold in compliance with the
Securities Act of 1933, Regulation D (Reg. D), Rules 230.501-230.503 and
230.505 and which satisfy the following further conditions and limitations:

1. The issuer and persons acting on its behalf shall have
reasonable grounds to believe, and after making reasonable inquiry shall
believe, that all persons who offer or sell securities subject to this section
are registered in accordance with § 13.1-505 of the Act except in the case of
an agent of the issuer who receives no sales commission directly or indirectly
for offering or selling the securities and who is not subject to subdivision 2
of this subsection.

2. No exemption under this section shall be available for
the securities of any issuer if any of the persons described in the Securities
Act of 1933, Regulation A, Rule 230.262(a), (b), or (c) (17 CFR 230.262):

a. Has filed a registration statement which is the subject
of a currently effective stop order entered pursuant to any state's securities
law within five years prior to the beginning of the offering.

b. Has been convicted within five years prior to the
beginning of the offering of a felony or misdemeanor in connection with the
purchase or sale of a security or a felony involving fraud or deceit, including
but not limited to forgery, embezzlement, obtaining money under false pretenses,
larceny or conspiracy to defraud.

c. Is currently subject to a state's administrative order
or judgment entered by that state's securities administrator within five years
prior to the beginning of the offering or is subject to a state's
administrative order or judgment in which fraud or deceit, including but not
limited to making untrue statements of material facts or omitting to state
material facts, was found and the order or judgment was entered within five
years prior to the beginning of the offering.

d. Is currently subject to a state's administrative order
or judgment which prohibits the use of any exemption from registration in
connection with the purchase or sale of securities.

e. Is currently subject to an order, judgment, or decree of
a court of competent jurisdiction temporarily or preliminarily restraining or
enjoining, or is subject to an order, judgment or decree of any court of
competent jurisdiction, entered within five years prior to the beginning of the
offering, permanently restraining or enjoining such person from engaging in or
continuing any conduct or practice in connection with the purchase or sale of
any security or involving the making of a false filing with a state.

f. The prohibitions of subdivisions a, b, c and e of this
subdivision shall not apply if the party subject to the disqualifying order,
judgment or decree is duly licensed or registered to conduct securities related
business in the state in which the administrative order, judgment or decree was
entered against such party.

g. A disqualification caused by this subsection is
automatically waived if the state securities administrator or agency of the
state which created the basis for disqualification, or the State Corporation
Commission, determines upon a showing of good cause that it is not necessary
under the circumstances that the exemption under this section be denied.

3. The issuer shall file with the commission no later than
15 days after the first sale in this state from an offering being made in
reliance upon this exemption:

a. A notice on Form D (17 CFR 239.500), as filed with the
SEC.

b. A filing fee of $250 payable to the Treasurer of
Virginia.

4. In sales to nonaccredited investors, the issuer and
persons acting on its behalf shall have reasonable grounds to believe, and
after making reasonable inquiry shall believe, that the investment is suitable
for the purchaser as to the purchaser's other security holdings and financial
situation and needs.

5. Offers and sales of securities which are exempted by
this section shall not be combined with offers and sales of securities exempted
by another regulation or section of the Act; however, nothing in this
limitation shall act as an election. The issuer may claim the availability of
another applicable exemption should, for any reason, the securities or persons
fail to comply with the conditions and limitations of this exemption.

6. In any proceeding involving this section, the burden of
proving the exemption or an exception from a definition or condition is upon
the person claiming it.

C. The exemption authorized by this section shall be known
and may be cited as the "Uniform Limited Offering Exemption."

21VAC5-45-40. Federal crowdfunding offerings.

A. An issuer that offers and sells securities in the
Commonwealth in an offering exempt under federal Regulation Crowdfunding (17
CFR 227.100 through 17 CFR 227.503) and §§ 4(a)(6) and 18(b)(4)(c) of the
Securities Act of 1933 (15 USC § 77a), and that either (i) has its principal
place of business in the Commonwealth or (ii) sells 50% or greater of the
aggregate amount of the offering to residents of the Commonwealth, shall file
the following with the commission:

1. A completed Uniform Notice of Federal Crowdfunding
Offering form or copies of all documents filed with the Securities and Exchange
Commission (SEC); and

2. A consent to service of process on Form U-2 if not
filing on the Uniform Notice of Federal Crowdfunding form.

B. If the issuer has its principal place of business in
the Commonwealth, the filing required under subsection A of this section shall
be filed with the commission when the issuer makes its initial Form C filing
concerning the offering with the SEC. If the issuer does not have its principal
place of business in the Commonwealth but residents of the Commonwealth have
purchased 50% or greater of the aggregate amount of the offering, the filing
required under subsection A of this section shall be filed when the issuer
becomes aware that such purchases have met this threshold and in no event later
than 30 days from the date of completion of the offering.

C. The initial notice filing is effective for 12 months
from the date of the filing with the commission.

D. For each additional 12-month period in which the same
offering is continued, an issuer conducting an offering under federal
Regulation Crowdfunding may renew its notice filing by filing on or before the
expiration of the notice filing a completed Uniform Notice of Federal
Crowdfunding Offering form marked "renewal" or a cover letter or
other document requesting renewal.

E. An issuer may increase the amount of securities offered
in the Commonwealth by submitting a completed Uniform Notice of Federal
Crowdfunding Offering form marked "amendment" or other document
describing the transaction.

NOTICE: The following
forms used in administering the regulation were filed by the agency. The forms
are not being published; however, online users of this issue of the Virginia
Register of Regulations may click on the name of a form with a hyperlink to
access it. The forms are also available from the agency contact or may be
viewed at the Office of the Registrar of Regulations, 900 East Main Street,
11th Floor, Richmond, Virginia 23219.

Part II
Investment Advisor Representative Registration, Expiration, Updates and
Amendments, Termination, and Changing Connection from One Investment Advisor to
Another

21VAC5-80-70. Application for registration as an investment
advisor representative.

A. Application for registration as an investment advisor
representative shall be filed in compliance with all requirements of CRD and in
full compliance with forms and regulations prescribed by the commission. The
application shall include all information required by such forms.

B. An application shall be deemed incomplete for registration
as an investment advisor representative unless the following executed forms,
fee, and information are submitted:

1. Form U4.

2. The statutory fee made payable to FINRA in the amount of $30$40.

3. Evidence of passing: (i) the Uniform Investment Adviser Law
Examination, Series 65; (ii) the Uniform Combined State Law Examination, Series
66, and the General Securities Representative Examination, Series 7; or (iii) a
similar examination in general use by securities administrators which, after
reasonable notice and subject to review by the commission, the Director of the
Division of Securities and Retail Franchising designates.

4. All individuals listed on Part 1 of Form ADV in Schedule A
and Item 2. A. of Part 1B as having supervisory responsibilities of the
investment advisor shall take and pass the examinations as required in
subdivision 3 of this subsection, and register as a representative of the
investment advisor.

5. Any other information the commission may require.

C. The commission shall either grant or deny each application
for registration within 30 days after it is filed. However, if additional time
is needed to obtain or verify information regarding the application, the
commission may extend such period as much as 90 days by giving written notice
to the applicant. No more than three such extensions may be made by the
commission on any one application. An extension of the initial 30-day period,
not to exceed 90 days, shall be granted upon written request of the applicant.

21VAC5-80-90. Renewals.

To renew the registration of its investment advisor
representatives, an investment advisor or federal covered advisor will be
billed by IARD the statutory fee of $30$40 per investment
advisor representative. A renewal of registration shall be granted as a matter
of course upon payment of the proper fee or fees unless the registration was,
or the renewal would be, subject to revocation under § 13.1-506 of the
Act.

VA.R. Doc. No. R18-5046; Filed September 26, 2017, 11:48 a.m.

TITLE 21. SECURITIES AND RETAIL FRANCHISING

STATE CORPORATION COMMISSION

Proposed Regulation

REGISTRAR'S NOTICE: The
State Corporation Commission is claiming an exemption from the Administrative
Process Act in accordance with § 2.2-4002 A 2 of the Code of Virginia,
which exempts courts, any agency of the Supreme Court, and any agency that by
the Constitution is expressly granted any of the powers of a court of record.

The proposed regulatory action pertains to the
administration and enforcement of the Virginia Securities Act and affects
several regulatory chapters. Proposed amendments to 21VAC5-20, Broker-dealers,
Broker-dealer Agents and Agents of the Issuer, and 21VAC5-80, Investment
Advisors, increase the registration and annual renewal filing fee to $40 for
broker-dealer agents, agents of the issuer, and investment advisor
representatives. Proposed amendments to 21VAC5-30, Securities Registration,
update the Oil and Gas Programs statements of policy and add four statements of
policy of the North American Securities Administrators Association, as follows:
Promotional Shares, Loans & Other Material Transactions, Impoundment of
Proceeds, and Electronic Offering Documents and Electronic Signatures. The
proposed action repeals the section of 21VAC5-40, Exempt Securities and
Transactions, regarding the Regulation D, Rule 505 exemption due to the repeal
of Rule 505 by the U.S. Securities and Exchange Commission (SEC) in October
2016. A new section is proposed in 21VAC5-45, Federal Covered Securities, to
establish a notice filing requirement for issuers conducting a federal
crowdfunding securities offering. In May of 2016, the SEC adopted the final
rules for federal crowdfunding that preempted the requirement of the
registration of these offerings. However, a state that is home to the principal
place of business of the issuer or in which residents have purchased 50% or
more of the offering amount may require a notice filing that contains all
documents filed with the SEC together with a consent to service of process.

AT RICHMOND, SEPTEMBER 26, 2017

COMMONWEALTH OF VIRGINIA, ex rel.

STATE CORPORATION COMMISSION

CASE NO. SEC-2017-00034

Ex Parte: In the matter of
Adopting a Revision to the Rules
Governing the Virginia Securities Act

ORDER TO TAKE NOTICE

Section 12.1-13 of the Code of Virginia ("Code")
provides that the State Corporation Commission ("Commission") shall
have the power to promulgate rules and regulations in the enforcement and
administration of all laws within its jurisdiction. Section 13.1-523 of the
Virginia Securities Act ("Act"), § 13.1-501 et seq. of the Code
provides that the Commission may issue any rules and regulations necessary or
appropriate for the administration and enforcement of the Act.

The rules and regulations issued by the Commission pursuant
to the Act are set forth in Title 21 of the Virginia Administrative Code. A
copy also may be found at the Commission's website:
http://www.scc.virginia.gov/case.

Proposed Revision to Chapter 20. Registration and Renewal
Filing Fees for Agents: The proposed amendment to Chapter 20 provides for an
increase in the registration and annual renewal filing fee for broker-dealer
agents (including Canadian agents) and agents of the issuer from $30 to $40.
The fee has not been raised since it was adopted by rule in 1981. From that
time to the present, the number and complexity of audits of these registrants'
offices has increased, necessitating the increase in the registration fee. The
Division of Securities and Retail Franchising ("Division") will apply
the additional fees towards the cost to conduct audits.

Proposed Revision to Chapter 30. Adoption of Statements of
Policy: The Division is a member of the North American Securities
Administrators Association ("NASAA"), a trade association of state
regulators. As a member of NASAA, the Division participates in a nationwide
effort to use a uniform approach to the review of offerings registered in the
states. From time to time, NASAA revises and adds to the list of standard
policies applicable to certain offerings. The Division is updating and revising
its list of these statements to add four additional items: Promotional Shares,
Loans and Other Material Transactions, Impoundment of Proceeds, and Electronic
Offering Documents and Electronic Signatures. The last item, Electronic
Offering Documents and Electronic Signatures, will allow issuers to move away
from providing investors with large cumbersome prospectuses and provide for the
electronic delivery and signatures.

Proposed Revision to Chapter 40. Repeal of Regulation D, Rule
505: In 1983, the Division adopted by rule (as amended) an exemption
promulgated by the United States Securities and Exchange Commission
("SEC") known as Regulation D that provided for an exemption for
offerings of up to $5 million of securities in any 12-month period to an
unlimited number of accredited investors and up to 35 non-accredited but
sophisticated investors, as long as non-accredited investors are provided
certain prescribed information about the issuer and the securities. Regulation
D, Rule 505 of Section 3(a)(11) of the Securities Act of 1933 ("1933
Act"), and Rule 147 thereunder provide an exemption from the 1933 Act
registration for offerings within a single state by issuers incorporated or
organized, having their principal office and doing business in such state. In October
2016, the SEC repealed Rule 505, making the companion subsection under the
current Commission regulations unnecessary. The Division proposes that the
section be repealed.

Revision to Chapter 45. Adoption of Federal Crowdfunding:
In 2015, the Division proposed an exemption from registration for certain
intrastate offerings known as crowdfunding. The Virginia Intrastate
Crowdfunding Exemption was adopted by the Commission in July 2015 under
Commission Rule 21VAC5-40-190. At the time that the Commission developed the
intrastate crowdfunding exemption, the SEC was working on a crowdfunding
proposal for interstate offerings. In May 2016, the SEC adopted the final rules
for federal crowdfunding. The final rule can be found at
https://www.sec.gov/rules/final/2015/33-9974.pdf.

When the SEC adopted the final rules governing interstate
crowdfunding, the states were preempted from requiring the registration of such
offerings. However, a state that is home to the principal place of business of
the issuer, or in which residents have purchased 50% or greater of the
aggregate offering amount, may require a notice filing that contains all
documents filed with the SEC together with a consent to service of process.

In order to facilitate that process, NASAA developed a model
notice filing so that the states could adopt the notice filing in a consistent
manner. This will allow interstate offerings to comply with the federal
crowdfunding rule and make the appropriate state notice filings.

The Division proposes that the Commission adopt the notice
filing requirement for federal crowdfunding offerings to include the Form U-CF
for notice filing.

Proposed Revision to Chapter 80. Registration and Renewal
Filing Fees for Investment Advisor Representatives: The proposed amendment to
Chapter 80 provides for an increase in the registration and annual renewal
filing fee for investment advisor representatives from $30 to $40. The fee has
not been raised since it was adopted by rule in 1981. From that time to the
present, the number and complexity of audits of these registrants' offices has
increased, necessitating the increase in the registration fee. The
Division will apply the additional fees to the cost to conduct audits.

The Division recommended to the Commission that the proposed
revisions should be considered for adoption. The Division also has recommended
to the Commission that a hearing should be held only if requested by those
interested parties who specifically indicate that a hearing is necessary and
the reasons therefore.

A copy of the proposed revisions may be requested by
interested parties from the Division by telephone, regular mail or email
request, and also can be found at the Division's website:
http://www.scc.virginia.gov/srf. Any comments to the proposed rules must be
received by November 1, 2017.

Accordingly, IT IS ORDERED THAT:

(1) The proposed revisions are appended hereto and made a
part of the record herein.

(2) On or before November 1, 2017, comments or request for
hearing on the proposed revisions must be submitted in writing to Joel H. Peck,
Clerk, State Corporation Commission, c/o Document Control Center, P.O. Box
2118, Richmond, Virginia 23218. Requests for hearing shall state why a hearing
is necessary and why the issues cannot be adequately addressed in written comments.
All correspondence shall reference Case No. SEC-2017-00034. Interested persons
desiring to submit comments electronically may do so by following the
instructions available at the Commission's website:
http://www.scc.virginia.gov/case.

(3) The proposed revisions shall be posted on the
Commission's website at http://www.scc.virginia.gov/case and on the Division's
website at http://www.scc.virginia.gov/srf. Interested persons also may request
a copy of the proposed revisions from the Division by telephone, mail, or
email.

AN ATTESTED COPY hereof, together with a copy of the proposed
revisions, shall be provided to the Registrar of Regulations for appropriate
publication in the Virginia Register of Regulations.

AN ATTESTED COPY hereof shall be sent to the Director of the
Division of Securities and Retail Franchising who shall forthwith provide
notice of this Order via U.S. mail or a copy of this Order may be sent by
e-mail to any interested persons as he may designate.

Part II
Broker-Dealer Agents

21VAC5-20-90. Application for registration as a broker-dealer
agent.

A. Application for registration as an agent of a FINRA member
shall be filed on and in compliance with all requirements of CRD and in full
compliance with the forms and regulations prescribed by the commission. The
application shall include all information required by such forms.

An application shall be deemed incomplete for registration as
a broker-dealer agent unless the applicant submits the following executed
forms, fee, and information:

1. Form U4.

2. The statutory fee made payable to FINRA in the amount of $30$40.

3. Evidence in the form of a FINRA exam report of passing
within the two-year period immediately preceding the date of the application:
(i) the Uniform Securities Agent State Law Examination, Series 63; (ii) the
Uniform Combined State Law Examination, Series 66; or (iii) a similar
examination in general use by securities administrators which, after reasonable
notice and subject to review by the commission, the Director of the Division of
Securities and Retail Franchising designates.

4. Any other information the commission may require.

B. Application for registration for non-FINRA member
broker-dealer agents shall be filed on and in compliance with all requirements
and forms prescribed by the commission.

An application shall be deemed incomplete for registration as
a broker-dealer agent unless the applicant submits the following executed
forms, fee, and information:

1. Form U4.

2. The statutory fee in the amount of $30$40.
The check must be made payable to the Treasurer of Virginia.

3. Evidence in the form of a FINRA exam report of passing
within the two-year period immediately preceding the date of the application:
(i) the Uniform Securities Agent State Law Examination, Series 63; (ii) the
Uniform Combined State Law Examination, Series 66; or (iii) a similar
examination in general use by securities administrators which, after reasonable
notice and subject to review by the commission, the Director of the Division of
Securities and Retail Franchising designates.

4. Any other information the commission may require.

C. The commission shall either grant or deny each application
for registration within 30 days after it is filed. However, if additional time
is needed to obtain or verify information regarding the application, the
commission may extend such period as much as 90 days by giving written notice
to the applicant. No more than three such extensions may be made by the
commission on any one application. An extension of the initial 30-day period,
not to exceed 90 days, shall be granted upon written request of the applicant.

21VAC5-20-110. Renewals.

A. To renew the registration or registrations of its
broker-dealer agent or agents, a FINRA member broker-dealer will be billed by
CRD the statutory fee of $30$40 per broker-dealer agent. A
renewal of registration or registrations shall be granted as a matter of course
upon payment of the proper fee or fees unless the registration was, or the
renewal would be, subject to revocation under § 13.1-506 of the Code of
Virginia.

B. A non-FINRA member broker-dealer shall file with the
commission at its Division of Securities and Retail Franchising the following
items at least 30 days prior to the expiration of registration.

1. Agents to be Renewed (Form S.D.4.A) accompanied by the
statutory fee of $30$40 for each agent whose registration
is to be renewed. The check must be made payable to the Treasurer of Virginia.

2. If applicable, Agents to be Canceled with clear records
(Form S.D.4.B).

3. If applicable, Agents to be Canceled without clear records
(Form S.D.4.C).

21VAC5-20-155. Limited Canadian broker-dealer agent
registration.

A. An agent of a Canadian broker-dealer who has no office or
other physical presence in the Commonwealth of Virginia may, provided the
broker-dealer agent is registered under this section, effect transactions in
securities as permitted for a broker-dealer registered under 21VAC5-20-85.

B. Application for registration as a broker-dealer agent
under this section shall be filed with the commission at its Division of
Securities and Retail Franchising or such other entity designated by the
commission on and in full compliance with forms prescribed by the commission
and shall include all information required by such forms.

C. An application for registration as a broker-dealer agent
under this section shall be deemed incomplete for purposes of applying for
registration unless the following executed forms, fee, and information are
submitted to the commission:

1. An application in the form required by the jurisdiction in
which the broker-dealer maintains its principal place of business.

2. Statutory fee payable to the Treasurer of Virginia in the
amount of $30$40 United States currency pursuant to
§ 13.1-505 G of the Act.

3. Evidence that the applicant is registered as a
broker-dealer agent in the jurisdiction from which it is effecting the
transactions.

4. Any other information the commission may require.

D. A broker-dealer agent registered under this section shall:

1. Maintain his provincial or territorial registration in good
standing;

2. Immediately notify the commission of any criminal action
taken against him or of any finding or sanction imposed on him as a result of
any self-regulatory or regulatory action involving fraud, theft, deceit,
misrepresentation or similar conduct.

E. A broker-dealer agent's registration under this section,
and any renewal thereof, shall expire annually at midnight on the 31st day of
December unless renewed in accordance with subsection F of this section.

F. To renew the registrations of its agents, a broker-dealer
registered under this section shall file with the commission at its division
the most recent renewal application, if any, filed in the jurisdiction in which
the broker-dealer maintains its principal place of business, or if no such
renewal application is required, the most recent application filed pursuant to
subdivision C 1 of this section along with the statutory fee in the amount of $30$40 United States currency pursuant to § 13.1-505 G of the Act.

G. A Canadian broker-dealer agent registered under this
section and acting in accordance with the limitations set out in this section
is exempt from all other rules applicable to a broker-dealer agent except the
anti-fraud provisions of the Act and the requirements set out in this section.

Part III
Agents of the Issuer

21VAC5-20-160. Application for registration as an agent of the
issuer.

A. Application for registration as an agent of the issuer
shall be filed on and in compliance with all requirements and forms prescribed
by the commission.

B. An application shall be deemed incomplete for registration
as an agent of the issuer unless the following executed forms, fee, and
information are submitted:

1. Form U4.

2. The statutory fee in the amount of $30$40.
The check must be made payable to the Treasurer of Virginia.

3. Evidence in the form of a FINRA exam report of passing
within the two-year period immediately preceding the date of the application:
(i) the Uniform Securities Agent State Law Examination, Series 63; (ii) the
Uniform Combined State Law Examination, Series 66; or (iii) a similar
examination in general use by securities administrators which, after reasonable
notice and subject to review by the commission, the Director of the Division of
Securities and Retail Franchising designates.

4. Any individual who meets the qualifications set forth in
subdivision B 3 of this section and has been registered in any state
jurisdiction requiring registration within the two-year period immediately
preceding the date of the filing of an application shall not be required to
comply with the examination requirement set forth in subdivision B 3 of this
section, except that the Director of Securities and Retail Franchising may
require additional examinations for any individual found to have violated any
federal or state securities laws.

5. Any other information the commission may require.

C. The commission shall either grant or deny each application
for registration within 30 days after it is filed. However, if additional time
is needed to obtain or verify information regarding the application, the
commission may extend such period as much as 90 days by giving written notice
to the applicant. No more than three such extensions may be made by the
commission on any one application. An extension of the initial 30-day period,
not to exceed 90 days, shall be granted upon written request of the applicant.

21VAC5-20-180. Renewals.

An issuer, on behalf of its agent or agents, shall file with
the commission at its Division of Securities and Retail Franchising at least 30
days prior to the expiration of registration a registration renewal form (Form
S.D.4) accompanied by the statutory fee of $30$40 for each agent
whose registration is to be renewed. The check must be made payable to the
Treasurer of Virginia.

The commission adopts the following NASAANorth
American Securities Administration Association, Inc. (NASAA) statements of
policy that shall apply to the registration of securities in the Commonwealth.
It will be considered a basis for denial of an application if an offering fails
to comply with an applicable statement of policy. While applications not
conforming to a statement of policy shall be looked upon with disfavor, where
good cause is shown, certain provisions may be modified or waived by the
commission.

A. Nothing in this exemption is intended to relieve, or
should be construed as in any way relieving, issuers or persons acting on their
behalf from providing disclosure to prospective investors adequate to satisfy
the anti-fraud provisions of the Act.

In view of the objective of this section and the purpose
and policies underlying the Act, this exemption is not available to an issuer
with respect to a transaction which, although in technical compliance with this
section, is part of a plan or scheme to evade registration or the conditions or
limitations explicitly stated in this section.

Nothing in this section is intended to exempt registered
broker-dealers or agents from the due diligence standards otherwise applicable
to such registered persons.

Nothing in this section is intended to exempt a person
from the broker-dealer or agent registration requirements of Article 3 (§
13.1-504 et seq.) of Chapter 5 of Title 13.1 of the Code of Virginia, except in
the case of an agent of the issuer who receives no sales commission directly or
indirectly for offering or selling the securities and who is not subject to
subdivision B 2 of this section.

B. For the purpose of the limited offering exemption
referred to in § 13.1-514 B 13 of the Act, the following securities are
determined to be exempt from the securities registration requirements of
Article 4 (§ 13.1-507 et seq.) of Chapter 5 of Title 13.1 of the Code of
Virginia.

Any securities offered or sold in compliance with the
Securities Act of 1933, Regulation D (Reg. D), Rules 230.501-230.503 and
230.505 and which satisfy the following further conditions and limitations:

1. The issuer and persons acting on its behalf shall have
reasonable grounds to believe, and after making reasonable inquiry shall
believe, that all persons who offer or sell securities subject to this section
are registered in accordance with § 13.1-505 of the Act except in the case of
an agent of the issuer who receives no sales commission directly or indirectly
for offering or selling the securities and who is not subject to subdivision 2
of this subsection.

2. No exemption under this section shall be available for
the securities of any issuer if any of the persons described in the Securities
Act of 1933, Regulation A, Rule 230.262(a), (b), or (c) (17 CFR 230.262):

a. Has filed a registration statement which is the subject
of a currently effective stop order entered pursuant to any state's securities
law within five years prior to the beginning of the offering.

b. Has been convicted within five years prior to the
beginning of the offering of a felony or misdemeanor in connection with the
purchase or sale of a security or a felony involving fraud or deceit, including
but not limited to forgery, embezzlement, obtaining money under false pretenses,
larceny or conspiracy to defraud.

c. Is currently subject to a state's administrative order
or judgment entered by that state's securities administrator within five years
prior to the beginning of the offering or is subject to a state's
administrative order or judgment in which fraud or deceit, including but not
limited to making untrue statements of material facts or omitting to state
material facts, was found and the order or judgment was entered within five
years prior to the beginning of the offering.

d. Is currently subject to a state's administrative order
or judgment which prohibits the use of any exemption from registration in
connection with the purchase or sale of securities.

e. Is currently subject to an order, judgment, or decree of
a court of competent jurisdiction temporarily or preliminarily restraining or
enjoining, or is subject to an order, judgment or decree of any court of
competent jurisdiction, entered within five years prior to the beginning of the
offering, permanently restraining or enjoining such person from engaging in or
continuing any conduct or practice in connection with the purchase or sale of
any security or involving the making of a false filing with a state.

f. The prohibitions of subdivisions a, b, c and e of this
subdivision shall not apply if the party subject to the disqualifying order,
judgment or decree is duly licensed or registered to conduct securities related
business in the state in which the administrative order, judgment or decree was
entered against such party.

g. A disqualification caused by this subsection is
automatically waived if the state securities administrator or agency of the
state which created the basis for disqualification, or the State Corporation
Commission, determines upon a showing of good cause that it is not necessary
under the circumstances that the exemption under this section be denied.

3. The issuer shall file with the commission no later than
15 days after the first sale in this state from an offering being made in
reliance upon this exemption:

a. A notice on Form D (17 CFR 239.500), as filed with the
SEC.

b. A filing fee of $250 payable to the Treasurer of
Virginia.

4. In sales to nonaccredited investors, the issuer and
persons acting on its behalf shall have reasonable grounds to believe, and
after making reasonable inquiry shall believe, that the investment is suitable
for the purchaser as to the purchaser's other security holdings and financial
situation and needs.

5. Offers and sales of securities which are exempted by
this section shall not be combined with offers and sales of securities exempted
by another regulation or section of the Act; however, nothing in this
limitation shall act as an election. The issuer may claim the availability of
another applicable exemption should, for any reason, the securities or persons
fail to comply with the conditions and limitations of this exemption.

6. In any proceeding involving this section, the burden of
proving the exemption or an exception from a definition or condition is upon
the person claiming it.

C. The exemption authorized by this section shall be known
and may be cited as the "Uniform Limited Offering Exemption."

21VAC5-45-40. Federal crowdfunding offerings.

A. An issuer that offers and sells securities in the
Commonwealth in an offering exempt under federal Regulation Crowdfunding (17
CFR 227.100 through 17 CFR 227.503) and §§ 4(a)(6) and 18(b)(4)(c) of the
Securities Act of 1933 (15 USC § 77a), and that either (i) has its principal
place of business in the Commonwealth or (ii) sells 50% or greater of the
aggregate amount of the offering to residents of the Commonwealth, shall file
the following with the commission:

1. A completed Uniform Notice of Federal Crowdfunding
Offering form or copies of all documents filed with the Securities and Exchange
Commission (SEC); and

2. A consent to service of process on Form U-2 if not
filing on the Uniform Notice of Federal Crowdfunding form.

B. If the issuer has its principal place of business in
the Commonwealth, the filing required under subsection A of this section shall
be filed with the commission when the issuer makes its initial Form C filing
concerning the offering with the SEC. If the issuer does not have its principal
place of business in the Commonwealth but residents of the Commonwealth have
purchased 50% or greater of the aggregate amount of the offering, the filing
required under subsection A of this section shall be filed when the issuer
becomes aware that such purchases have met this threshold and in no event later
than 30 days from the date of completion of the offering.

C. The initial notice filing is effective for 12 months
from the date of the filing with the commission.

D. For each additional 12-month period in which the same
offering is continued, an issuer conducting an offering under federal
Regulation Crowdfunding may renew its notice filing by filing on or before the
expiration of the notice filing a completed Uniform Notice of Federal
Crowdfunding Offering form marked "renewal" or a cover letter or
other document requesting renewal.

E. An issuer may increase the amount of securities offered
in the Commonwealth by submitting a completed Uniform Notice of Federal
Crowdfunding Offering form marked "amendment" or other document
describing the transaction.

NOTICE: The following
forms used in administering the regulation were filed by the agency. The forms
are not being published; however, online users of this issue of the Virginia
Register of Regulations may click on the name of a form with a hyperlink to
access it. The forms are also available from the agency contact or may be
viewed at the Office of the Registrar of Regulations, 900 East Main Street,
11th Floor, Richmond, Virginia 23219.

Part II
Investment Advisor Representative Registration, Expiration, Updates and
Amendments, Termination, and Changing Connection from One Investment Advisor to
Another

21VAC5-80-70. Application for registration as an investment
advisor representative.

A. Application for registration as an investment advisor
representative shall be filed in compliance with all requirements of CRD and in
full compliance with forms and regulations prescribed by the commission. The
application shall include all information required by such forms.

B. An application shall be deemed incomplete for registration
as an investment advisor representative unless the following executed forms,
fee, and information are submitted:

1. Form U4.

2. The statutory fee made payable to FINRA in the amount of $30$40.

3. Evidence of passing: (i) the Uniform Investment Adviser Law
Examination, Series 65; (ii) the Uniform Combined State Law Examination, Series
66, and the General Securities Representative Examination, Series 7; or (iii) a
similar examination in general use by securities administrators which, after
reasonable notice and subject to review by the commission, the Director of the
Division of Securities and Retail Franchising designates.

4. All individuals listed on Part 1 of Form ADV in Schedule A
and Item 2. A. of Part 1B as having supervisory responsibilities of the
investment advisor shall take and pass the examinations as required in
subdivision 3 of this subsection, and register as a representative of the
investment advisor.

5. Any other information the commission may require.

C. The commission shall either grant or deny each application
for registration within 30 days after it is filed. However, if additional time
is needed to obtain or verify information regarding the application, the
commission may extend such period as much as 90 days by giving written notice
to the applicant. No more than three such extensions may be made by the
commission on any one application. An extension of the initial 30-day period,
not to exceed 90 days, shall be granted upon written request of the applicant.

21VAC5-80-90. Renewals.

To renew the registration of its investment advisor
representatives, an investment advisor or federal covered advisor will be
billed by IARD the statutory fee of $30$40 per investment
advisor representative. A renewal of registration shall be granted as a matter
of course upon payment of the proper fee or fees unless the registration was,
or the renewal would be, subject to revocation under § 13.1-506 of the
Act.

VA.R. Doc. No. R18-5046; Filed September 26, 2017, 11:48 a.m.

TITLE 21. SECURITIES AND RETAIL FRANCHISING

STATE CORPORATION COMMISSION

Proposed Regulation

REGISTRAR'S NOTICE: The
State Corporation Commission is claiming an exemption from the Administrative
Process Act in accordance with § 2.2-4002 A 2 of the Code of Virginia,
which exempts courts, any agency of the Supreme Court, and any agency that by
the Constitution is expressly granted any of the powers of a court of record.

The proposed regulatory action pertains to the
administration and enforcement of the Virginia Securities Act and affects
several regulatory chapters. Proposed amendments to 21VAC5-20, Broker-dealers,
Broker-dealer Agents and Agents of the Issuer, and 21VAC5-80, Investment
Advisors, increase the registration and annual renewal filing fee to $40 for
broker-dealer agents, agents of the issuer, and investment advisor
representatives. Proposed amendments to 21VAC5-30, Securities Registration,
update the Oil and Gas Programs statements of policy and add four statements of
policy of the North American Securities Administrators Association, as follows:
Promotional Shares, Loans & Other Material Transactions, Impoundment of
Proceeds, and Electronic Offering Documents and Electronic Signatures. The
proposed action repeals the section of 21VAC5-40, Exempt Securities and
Transactions, regarding the Regulation D, Rule 505 exemption due to the repeal
of Rule 505 by the U.S. Securities and Exchange Commission (SEC) in October
2016. A new section is proposed in 21VAC5-45, Federal Covered Securities, to
establish a notice filing requirement for issuers conducting a federal
crowdfunding securities offering. In May of 2016, the SEC adopted the final
rules for federal crowdfunding that preempted the requirement of the
registration of these offerings. However, a state that is home to the principal
place of business of the issuer or in which residents have purchased 50% or
more of the offering amount may require a notice filing that contains all
documents filed with the SEC together with a consent to service of process.

AT RICHMOND, SEPTEMBER 26, 2017

COMMONWEALTH OF VIRGINIA, ex rel.

STATE CORPORATION COMMISSION

CASE NO. SEC-2017-00034

Ex Parte: In the matter of
Adopting a Revision to the Rules
Governing the Virginia Securities Act

ORDER TO TAKE NOTICE

Section 12.1-13 of the Code of Virginia ("Code")
provides that the State Corporation Commission ("Commission") shall
have the power to promulgate rules and regulations in the enforcement and
administration of all laws within its jurisdiction. Section 13.1-523 of the
Virginia Securities Act ("Act"), § 13.1-501 et seq. of the Code
provides that the Commission may issue any rules and regulations necessary or
appropriate for the administration and enforcement of the Act.

The rules and regulations issued by the Commission pursuant
to the Act are set forth in Title 21 of the Virginia Administrative Code. A
copy also may be found at the Commission's website:
http://www.scc.virginia.gov/case.

Proposed Revision to Chapter 20. Registration and Renewal
Filing Fees for Agents: The proposed amendment to Chapter 20 provides for an
increase in the registration and annual renewal filing fee for broker-dealer
agents (including Canadian agents) and agents of the issuer from $30 to $40.
The fee has not been raised since it was adopted by rule in 1981. From that
time to the present, the number and complexity of audits of these registrants'
offices has increased, necessitating the increase in the registration fee. The
Division of Securities and Retail Franchising ("Division") will apply
the additional fees towards the cost to conduct audits.

Proposed Revision to Chapter 30. Adoption of Statements of
Policy: The Division is a member of the North American Securities
Administrators Association ("NASAA"), a trade association of state
regulators. As a member of NASAA, the Division participates in a nationwide
effort to use a uniform approach to the review of offerings registered in the
states. From time to time, NASAA revises and adds to the list of standard
policies applicable to certain offerings. The Division is updating and revising
its list of these statements to add four additional items: Promotional Shares,
Loans and Other Material Transactions, Impoundment of Proceeds, and Electronic
Offering Documents and Electronic Signatures. The last item, Electronic
Offering Documents and Electronic Signatures, will allow issuers to move away
from providing investors with large cumbersome prospectuses and provide for the
electronic delivery and signatures.

Proposed Revision to Chapter 40. Repeal of Regulation D, Rule
505: In 1983, the Division adopted by rule (as amended) an exemption
promulgated by the United States Securities and Exchange Commission
("SEC") known as Regulation D that provided for an exemption for
offerings of up to $5 million of securities in any 12-month period to an
unlimited number of accredited investors and up to 35 non-accredited but
sophisticated investors, as long as non-accredited investors are provided
certain prescribed information about the issuer and the securities. Regulation
D, Rule 505 of Section 3(a)(11) of the Securities Act of 1933 ("1933
Act"), and Rule 147 thereunder provide an exemption from the 1933 Act
registration for offerings within a single state by issuers incorporated or
organized, having their principal office and doing business in such state. In October
2016, the SEC repealed Rule 505, making the companion subsection under the
current Commission regulations unnecessary. The Division proposes that the
section be repealed.

Revision to Chapter 45. Adoption of Federal Crowdfunding:
In 2015, the Division proposed an exemption from registration for certain
intrastate offerings known as crowdfunding. The Virginia Intrastate
Crowdfunding Exemption was adopted by the Commission in July 2015 under
Commission Rule 21VAC5-40-190. At the time that the Commission developed the
intrastate crowdfunding exemption, the SEC was working on a crowdfunding
proposal for interstate offerings. In May 2016, the SEC adopted the final rules
for federal crowdfunding. The final rule can be found at
https://www.sec.gov/rules/final/2015/33-9974.pdf.

When the SEC adopted the final rules governing interstate
crowdfunding, the states were preempted from requiring the registration of such
offerings. However, a state that is home to the principal place of business of
the issuer, or in which residents have purchased 50% or greater of the
aggregate offering amount, may require a notice filing that contains all
documents filed with the SEC together with a consent to service of process.

In order to facilitate that process, NASAA developed a model
notice filing so that the states could adopt the notice filing in a consistent
manner. This will allow interstate offerings to comply with the federal
crowdfunding rule and make the appropriate state notice filings.

The Division proposes that the Commission adopt the notice
filing requirement for federal crowdfunding offerings to include the Form U-CF
for notice filing.

Proposed Revision to Chapter 80. Registration and Renewal
Filing Fees for Investment Advisor Representatives: The proposed amendment to
Chapter 80 provides for an increase in the registration and annual renewal
filing fee for investment advisor representatives from $30 to $40. The fee has
not been raised since it was adopted by rule in 1981. From that time to the
present, the number and complexity of audits of these registrants' offices has
increased, necessitating the increase in the registration fee. The
Division will apply the additional fees to the cost to conduct audits.

The Division recommended to the Commission that the proposed
revisions should be considered for adoption. The Division also has recommended
to the Commission that a hearing should be held only if requested by those
interested parties who specifically indicate that a hearing is necessary and
the reasons therefore.

A copy of the proposed revisions may be requested by
interested parties from the Division by telephone, regular mail or email
request, and also can be found at the Division's website:
http://www.scc.virginia.gov/srf. Any comments to the proposed rules must be
received by November 1, 2017.

Accordingly, IT IS ORDERED THAT:

(1) The proposed revisions are appended hereto and made a
part of the record herein.

(2) On or before November 1, 2017, comments or request for
hearing on the proposed revisions must be submitted in writing to Joel H. Peck,
Clerk, State Corporation Commission, c/o Document Control Center, P.O. Box
2118, Richmond, Virginia 23218. Requests for hearing shall state why a hearing
is necessary and why the issues cannot be adequately addressed in written comments.
All correspondence shall reference Case No. SEC-2017-00034. Interested persons
desiring to submit comments electronically may do so by following the
instructions available at the Commission's website:
http://www.scc.virginia.gov/case.

(3) The proposed revisions shall be posted on the
Commission's website at http://www.scc.virginia.gov/case and on the Division's
website at http://www.scc.virginia.gov/srf. Interested persons also may request
a copy of the proposed revisions from the Division by telephone, mail, or
email.

AN ATTESTED COPY hereof, together with a copy of the proposed
revisions, shall be provided to the Registrar of Regulations for appropriate
publication in the Virginia Register of Regulations.

AN ATTESTED COPY hereof shall be sent to the Director of the
Division of Securities and Retail Franchising who shall forthwith provide
notice of this Order via U.S. mail or a copy of this Order may be sent by
e-mail to any interested persons as he may designate.

Part II
Broker-Dealer Agents

21VAC5-20-90. Application for registration as a broker-dealer
agent.

A. Application for registration as an agent of a FINRA member
shall be filed on and in compliance with all requirements of CRD and in full
compliance with the forms and regulations prescribed by the commission. The
application shall include all information required by such forms.

An application shall be deemed incomplete for registration as
a broker-dealer agent unless the applicant submits the following executed
forms, fee, and information:

1. Form U4.

2. The statutory fee made payable to FINRA in the amount of $30$40.

3. Evidence in the form of a FINRA exam report of passing
within the two-year period immediately preceding the date of the application:
(i) the Uniform Securities Agent State Law Examination, Series 63; (ii) the
Uniform Combined State Law Examination, Series 66; or (iii) a similar
examination in general use by securities administrators which, after reasonable
notice and subject to review by the commission, the Director of the Division of
Securities and Retail Franchising designates.

4. Any other information the commission may require.

B. Application for registration for non-FINRA member
broker-dealer agents shall be filed on and in compliance with all requirements
and forms prescribed by the commission.

An application shall be deemed incomplete for registration as
a broker-dealer agent unless the applicant submits the following executed
forms, fee, and information:

1. Form U4.

2. The statutory fee in the amount of $30$40.
The check must be made payable to the Treasurer of Virginia.

3. Evidence in the form of a FINRA exam report of passing
within the two-year period immediately preceding the date of the application:
(i) the Uniform Securities Agent State Law Examination, Series 63; (ii) the
Uniform Combined State Law Examination, Series 66; or (iii) a similar
examination in general use by securities administrators which, after reasonable
notice and subject to review by the commission, the Director of the Division of
Securities and Retail Franchising designates.

4. Any other information the commission may require.

C. The commission shall either grant or deny each application
for registration within 30 days after it is filed. However, if additional time
is needed to obtain or verify information regarding the application, the
commission may extend such period as much as 90 days by giving written notice
to the applicant. No more than three such extensions may be made by the
commission on any one application. An extension of the initial 30-day period,
not to exceed 90 days, shall be granted upon written request of the applicant.

21VAC5-20-110. Renewals.

A. To renew the registration or registrations of its
broker-dealer agent or agents, a FINRA member broker-dealer will be billed by
CRD the statutory fee of $30$40 per broker-dealer agent. A
renewal of registration or registrations shall be granted as a matter of course
upon payment of the proper fee or fees unless the registration was, or the
renewal would be, subject to revocation under § 13.1-506 of the Code of
Virginia.

B. A non-FINRA member broker-dealer shall file with the
commission at its Division of Securities and Retail Franchising the following
items at least 30 days prior to the expiration of registration.

1. Agents to be Renewed (Form S.D.4.A) accompanied by the
statutory fee of $30$40 for each agent whose registration
is to be renewed. The check must be made payable to the Treasurer of Virginia.

2. If applicable, Agents to be Canceled with clear records
(Form S.D.4.B).

3. If applicable, Agents to be Canceled without clear records
(Form S.D.4.C).

21VAC5-20-155. Limited Canadian broker-dealer agent
registration.

A. An agent of a Canadian broker-dealer who has no office or
other physical presence in the Commonwealth of Virginia may, provided the
broker-dealer agent is registered under this section, effect transactions in
securities as permitted for a broker-dealer registered under 21VAC5-20-85.

B. Application for registration as a broker-dealer agent
under this section shall be filed with the commission at its Division of
Securities and Retail Franchising or such other entity designated by the
commission on and in full compliance with forms prescribed by the commission
and shall include all information required by such forms.

C. An application for registration as a broker-dealer agent
under this section shall be deemed incomplete for purposes of applying for
registration unless the following executed forms, fee, and information are
submitted to the commission:

1. An application in the form required by the jurisdiction in
which the broker-dealer maintains its principal place of business.

2. Statutory fee payable to the Treasurer of Virginia in the
amount of $30$40 United States currency pursuant to
§ 13.1-505 G of the Act.

3. Evidence that the applicant is registered as a
broker-dealer agent in the jurisdiction from which it is effecting the
transactions.

4. Any other information the commission may require.

D. A broker-dealer agent registered under this section shall:

1. Maintain his provincial or territorial registration in good
standing;

2. Immediately notify the commission of any criminal action
taken against him or of any finding or sanction imposed on him as a result of
any self-regulatory or regulatory action involving fraud, theft, deceit,
misrepresentation or similar conduct.

E. A broker-dealer agent's registration under this section,
and any renewal thereof, shall expire annually at midnight on the 31st day of
December unless renewed in accordance with subsection F of this section.

F. To renew the registrations of its agents, a broker-dealer
registered under this section shall file with the commission at its division
the most recent renewal application, if any, filed in the jurisdiction in which
the broker-dealer maintains its principal place of business, or if no such
renewal application is required, the most recent application filed pursuant to
subdivision C 1 of this section along with the statutory fee in the amount of $30$40 United States currency pursuant to § 13.1-505 G of the Act.

G. A Canadian broker-dealer agent registered under this
section and acting in accordance with the limitations set out in this section
is exempt from all other rules applicable to a broker-dealer agent except the
anti-fraud provisions of the Act and the requirements set out in this section.

Part III
Agents of the Issuer

21VAC5-20-160. Application for registration as an agent of the
issuer.

A. Application for registration as an agent of the issuer
shall be filed on and in compliance with all requirements and forms prescribed
by the commission.

B. An application shall be deemed incomplete for registration
as an agent of the issuer unless the following executed forms, fee, and
information are submitted:

1. Form U4.

2. The statutory fee in the amount of $30$40.
The check must be made payable to the Treasurer of Virginia.

3. Evidence in the form of a FINRA exam report of passing
within the two-year period immediately preceding the date of the application:
(i) the Uniform Securities Agent State Law Examination, Series 63; (ii) the
Uniform Combined State Law Examination, Series 66; or (iii) a similar
examination in general use by securities administrators which, after reasonable
notice and subject to review by the commission, the Director of the Division of
Securities and Retail Franchising designates.

4. Any individual who meets the qualifications set forth in
subdivision B 3 of this section and has been registered in any state
jurisdiction requiring registration within the two-year period immediately
preceding the date of the filing of an application shall not be required to
comply with the examination requirement set forth in subdivision B 3 of this
section, except that the Director of Securities and Retail Franchising may
require additional examinations for any individual found to have violated any
federal or state securities laws.

5. Any other information the commission may require.

C. The commission shall either grant or deny each application
for registration within 30 days after it is filed. However, if additional time
is needed to obtain or verify information regarding the application, the
commission may extend such period as much as 90 days by giving written notice
to the applicant. No more than three such extensions may be made by the
commission on any one application. An extension of the initial 30-day period,
not to exceed 90 days, shall be granted upon written request of the applicant.

21VAC5-20-180. Renewals.

An issuer, on behalf of its agent or agents, shall file with
the commission at its Division of Securities and Retail Franchising at least 30
days prior to the expiration of registration a registration renewal form (Form
S.D.4) accompanied by the statutory fee of $30$40 for each agent
whose registration is to be renewed. The check must be made payable to the
Treasurer of Virginia.

The commission adopts the following NASAANorth
American Securities Administration Association, Inc. (NASAA) statements of
policy that shall apply to the registration of securities in the Commonwealth.
It will be considered a basis for denial of an application if an offering fails
to comply with an applicable statement of policy. While applications not
conforming to a statement of policy shall be looked upon with disfavor, where
good cause is shown, certain provisions may be modified or waived by the
commission.

A. Nothing in this exemption is intended to relieve, or
should be construed as in any way relieving, issuers or persons acting on their
behalf from providing disclosure to prospective investors adequate to satisfy
the anti-fraud provisions of the Act.

In view of the objective of this section and the purpose
and policies underlying the Act, this exemption is not available to an issuer
with respect to a transaction which, although in technical compliance with this
section, is part of a plan or scheme to evade registration or the conditions or
limitations explicitly stated in this section.

Nothing in this section is intended to exempt registered
broker-dealers or agents from the due diligence standards otherwise applicable
to such registered persons.

Nothing in this section is intended to exempt a person
from the broker-dealer or agent registration requirements of Article 3 (§
13.1-504 et seq.) of Chapter 5 of Title 13.1 of the Code of Virginia, except in
the case of an agent of the issuer who receives no sales commission directly or
indirectly for offering or selling the securities and who is not subject to
subdivision B 2 of this section.

B. For the purpose of the limited offering exemption
referred to in § 13.1-514 B 13 of the Act, the following securities are
determined to be exempt from the securities registration requirements of
Article 4 (§ 13.1-507 et seq.) of Chapter 5 of Title 13.1 of the Code of
Virginia.

Any securities offered or sold in compliance with the
Securities Act of 1933, Regulation D (Reg. D), Rules 230.501-230.503 and
230.505 and which satisfy the following further conditions and limitations:

1. The issuer and persons acting on its behalf shall have
reasonable grounds to believe, and after making reasonable inquiry shall
believe, that all persons who offer or sell securities subject to this section
are registered in accordance with § 13.1-505 of the Act except in the case of
an agent of the issuer who receives no sales commission directly or indirectly
for offering or selling the securities and who is not subject to subdivision 2
of this subsection.

2. No exemption under this section shall be available for
the securities of any issuer if any of the persons described in the Securities
Act of 1933, Regulation A, Rule 230.262(a), (b), or (c) (17 CFR 230.262):

a. Has filed a registration statement which is the subject
of a currently effective stop order entered pursuant to any state's securities
law within five years prior to the beginning of the offering.

b. Has been convicted within five years prior to the
beginning of the offering of a felony or misdemeanor in connection with the
purchase or sale of a security or a felony involving fraud or deceit, including
but not limited to forgery, embezzlement, obtaining money under false pretenses,
larceny or conspiracy to defraud.

c. Is currently subject to a state's administrative order
or judgment entered by that state's securities administrator within five years
prior to the beginning of the offering or is subject to a state's
administrative order or judgment in which fraud or deceit, including but not
limited to making untrue statements of material facts or omitting to state
material facts, was found and the order or judgment was entered within five
years prior to the beginning of the offering.

d. Is currently subject to a state's administrative order
or judgment which prohibits the use of any exemption from registration in
connection with the purchase or sale of securities.

e. Is currently subject to an order, judgment, or decree of
a court of competent jurisdiction temporarily or preliminarily restraining or
enjoining, or is subject to an order, judgment or decree of any court of
competent jurisdiction, entered within five years prior to the beginning of the
offering, permanently restraining or enjoining such person from engaging in or
continuing any conduct or practice in connection with the purchase or sale of
any security or involving the making of a false filing with a state.

f. The prohibitions of subdivisions a, b, c and e of this
subdivision shall not apply if the party subject to the disqualifying order,
judgment or decree is duly licensed or registered to conduct securities related
business in the state in which the administrative order, judgment or decree was
entered against such party.

g. A disqualification caused by this subsection is
automatically waived if the state securities administrator or agency of the
state which created the basis for disqualification, or the State Corporation
Commission, determines upon a showing of good cause that it is not necessary
under the circumstances that the exemption under this section be denied.

3. The issuer shall file with the commission no later than
15 days after the first sale in this state from an offering being made in
reliance upon this exemption:

a. A notice on Form D (17 CFR 239.500), as filed with the
SEC.

b. A filing fee of $250 payable to the Treasurer of
Virginia.

4. In sales to nonaccredited investors, the issuer and
persons acting on its behalf shall have reasonable grounds to believe, and
after making reasonable inquiry shall believe, that the investment is suitable
for the purchaser as to the purchaser's other security holdings and financial
situation and needs.

5. Offers and sales of securities which are exempted by
this section shall not be combined with offers and sales of securities exempted
by another regulation or section of the Act; however, nothing in this
limitation shall act as an election. The issuer may claim the availability of
another applicable exemption should, for any reason, the securities or persons
fail to comply with the conditions and limitations of this exemption.

6. In any proceeding involving this section, the burden of
proving the exemption or an exception from a definition or condition is upon
the person claiming it.

C. The exemption authorized by this section shall be known
and may be cited as the "Uniform Limited Offering Exemption."

21VAC5-45-40. Federal crowdfunding offerings.

A. An issuer that offers and sells securities in the
Commonwealth in an offering exempt under federal Regulation Crowdfunding (17
CFR 227.100 through 17 CFR 227.503) and §§ 4(a)(6) and 18(b)(4)(c) of the
Securities Act of 1933 (15 USC § 77a), and that either (i) has its principal
place of business in the Commonwealth or (ii) sells 50% or greater of the
aggregate amount of the offering to residents of the Commonwealth, shall file
the following with the commission:

1. A completed Uniform Notice of Federal Crowdfunding
Offering form or copies of all documents filed with the Securities and Exchange
Commission (SEC); and

2. A consent to service of process on Form U-2 if not
filing on the Uniform Notice of Federal Crowdfunding form.

B. If the issuer has its principal place of business in
the Commonwealth, the filing required under subsection A of this section shall
be filed with the commission when the issuer makes its initial Form C filing
concerning the offering with the SEC. If the issuer does not have its principal
place of business in the Commonwealth but residents of the Commonwealth have
purchased 50% or greater of the aggregate amount of the offering, the filing
required under subsection A of this section shall be filed when the issuer
becomes aware that such purchases have met this threshold and in no event later
than 30 days from the date of completion of the offering.

C. The initial notice filing is effective for 12 months
from the date of the filing with the commission.

D. For each additional 12-month period in which the same
offering is continued, an issuer conducting an offering under federal
Regulation Crowdfunding may renew its notice filing by filing on or before the
expiration of the notice filing a completed Uniform Notice of Federal
Crowdfunding Offering form marked "renewal" or a cover letter or
other document requesting renewal.

E. An issuer may increase the amount of securities offered
in the Commonwealth by submitting a completed Uniform Notice of Federal
Crowdfunding Offering form marked "amendment" or other document
describing the transaction.

NOTICE: The following
forms used in administering the regulation were filed by the agency. The forms
are not being published; however, online users of this issue of the Virginia
Register of Regulations may click on the name of a form with a hyperlink to
access it. The forms are also available from the agency contact or may be
viewed at the Office of the Registrar of Regulations, 900 East Main Street,
11th Floor, Richmond, Virginia 23219.

Part II
Investment Advisor Representative Registration, Expiration, Updates and
Amendments, Termination, and Changing Connection from One Investment Advisor to
Another

21VAC5-80-70. Application for registration as an investment
advisor representative.

A. Application for registration as an investment advisor
representative shall be filed in compliance with all requirements of CRD and in
full compliance with forms and regulations prescribed by the commission. The
application shall include all information required by such forms.

B. An application shall be deemed incomplete for registration
as an investment advisor representative unless the following executed forms,
fee, and information are submitted:

1. Form U4.

2. The statutory fee made payable to FINRA in the amount of $30$40.

3. Evidence of passing: (i) the Uniform Investment Adviser Law
Examination, Series 65; (ii) the Uniform Combined State Law Examination, Series
66, and the General Securities Representative Examination, Series 7; or (iii) a
similar examination in general use by securities administrators which, after
reasonable notice and subject to review by the commission, the Director of the
Division of Securities and Retail Franchising designates.

4. All individuals listed on Part 1 of Form ADV in Schedule A
and Item 2. A. of Part 1B as having supervisory responsibilities of the
investment advisor shall take and pass the examinations as required in
subdivision 3 of this subsection, and register as a representative of the
investment advisor.

5. Any other information the commission may require.

C. The commission shall either grant or deny each application
for registration within 30 days after it is filed. However, if additional time
is needed to obtain or verify information regarding the application, the
commission may extend such period as much as 90 days by giving written notice
to the applicant. No more than three such extensions may be made by the
commission on any one application. An extension of the initial 30-day period,
not to exceed 90 days, shall be granted upon written request of the applicant.

21VAC5-80-90. Renewals.

To renew the registration of its investment advisor
representatives, an investment advisor or federal covered advisor will be
billed by IARD the statutory fee of $30$40 per investment
advisor representative. A renewal of registration shall be granted as a matter
of course upon payment of the proper fee or fees unless the registration was,
or the renewal would be, subject to revocation under § 13.1-506 of the
Act.

VA.R. Doc. No. R18-5046; Filed September 26, 2017, 11:48 a.m.

TITLE 21. SECURITIES AND RETAIL FRANCHISING

STATE CORPORATION COMMISSION

Proposed Regulation

REGISTRAR'S NOTICE: The
State Corporation Commission is claiming an exemption from the Administrative
Process Act in accordance with § 2.2-4002 A 2 of the Code of Virginia,
which exempts courts, any agency of the Supreme Court, and any agency that by
the Constitution is expressly granted any of the powers of a court of record.

The proposed regulatory action pertains to the
administration and enforcement of the Virginia Securities Act and affects
several regulatory chapters. Proposed amendments to 21VAC5-20, Broker-dealers,
Broker-dealer Agents and Agents of the Issuer, and 21VAC5-80, Investment
Advisors, increase the registration and annual renewal filing fee to $40 for
broker-dealer agents, agents of the issuer, and investment advisor
representatives. Proposed amendments to 21VAC5-30, Securities Registration,
update the Oil and Gas Programs statements of policy and add four statements of
policy of the North American Securities Administrators Association, as follows:
Promotional Shares, Loans & Other Material Transactions, Impoundment of
Proceeds, and Electronic Offering Documents and Electronic Signatures. The
proposed action repeals the section of 21VAC5-40, Exempt Securities and
Transactions, regarding the Regulation D, Rule 505 exemption due to the repeal
of Rule 505 by the U.S. Securities and Exchange Commission (SEC) in October
2016. A new section is proposed in 21VAC5-45, Federal Covered Securities, to
establish a notice filing requirement for issuers conducting a federal
crowdfunding securities offering. In May of 2016, the SEC adopted the final
rules for federal crowdfunding that preempted the requirement of the
registration of these offerings. However, a state that is home to the principal
place of business of the issuer or in which residents have purchased 50% or
more of the offering amount may require a notice filing that contains all
documents filed with the SEC together with a consent to service of process.

AT RICHMOND, SEPTEMBER 26, 2017

COMMONWEALTH OF VIRGINIA, ex rel.

STATE CORPORATION COMMISSION

CASE NO. SEC-2017-00034

Ex Parte: In the matter of
Adopting a Revision to the Rules
Governing the Virginia Securities Act

ORDER TO TAKE NOTICE

Section 12.1-13 of the Code of Virginia ("Code")
provides that the State Corporation Commission ("Commission") shall
have the power to promulgate rules and regulations in the enforcement and
administration of all laws within its jurisdiction. Section 13.1-523 of the
Virginia Securities Act ("Act"), § 13.1-501 et seq. of the Code
provides that the Commission may issue any rules and regulations necessary or
appropriate for the administration and enforcement of the Act.

The rules and regulations issued by the Commission pursuant
to the Act are set forth in Title 21 of the Virginia Administrative Code. A
copy also may be found at the Commission's website:
http://www.scc.virginia.gov/case.

Proposed Revision to Chapter 20. Registration and Renewal
Filing Fees for Agents: The proposed amendment to Chapter 20 provides for an
increase in the registration and annual renewal filing fee for broker-dealer
agents (including Canadian agents) and agents of the issuer from $30 to $40.
The fee has not been raised since it was adopted by rule in 1981. From that
time to the present, the number and complexity of audits of these registrants'
offices has increased, necessitating the increase in the registration fee. The
Division of Securities and Retail Franchising ("Division") will apply
the additional fees towards the cost to conduct audits.

Proposed Revision to Chapter 30. Adoption of Statements of
Policy: The Division is a member of the North American Securities
Administrators Association ("NASAA"), a trade association of state
regulators. As a member of NASAA, the Division participates in a nationwide
effort to use a uniform approach to the review of offerings registered in the
states. From time to time, NASAA revises and adds to the list of standard
policies applicable to certain offerings. The Division is updating and revising
its list of these statements to add four additional items: Promotional Shares,
Loans and Other Material Transactions, Impoundment of Proceeds, and Electronic
Offering Documents and Electronic Signatures. The last item, Electronic
Offering Documents and Electronic Signatures, will allow issuers to move away
from providing investors with large cumbersome prospectuses and provide for the
electronic delivery and signatures.

Proposed Revision to Chapter 40. Repeal of Regulation D, Rule
505: In 1983, the Division adopted by rule (as amended) an exemption
promulgated by the United States Securities and Exchange Commission
("SEC") known as Regulation D that provided for an exemption for
offerings of up to $5 million of securities in any 12-month period to an
unlimited number of accredited investors and up to 35 non-accredited but
sophisticated investors, as long as non-accredited investors are provided
certain prescribed information about the issuer and the securities. Regulation
D, Rule 505 of Section 3(a)(11) of the Securities Act of 1933 ("1933
Act"), and Rule 147 thereunder provide an exemption from the 1933 Act
registration for offerings within a single state by issuers incorporated or
organized, having their principal office and doing business in such state. In October
2016, the SEC repealed Rule 505, making the companion subsection under the
current Commission regulations unnecessary. The Division proposes that the
section be repealed.

Revision to Chapter 45. Adoption of Federal Crowdfunding:
In 2015, the Division proposed an exemption from registration for certain
intrastate offerings known as crowdfunding. The Virginia Intrastate
Crowdfunding Exemption was adopted by the Commission in July 2015 under
Commission Rule 21VAC5-40-190. At the time that the Commission developed the
intrastate crowdfunding exemption, the SEC was working on a crowdfunding
proposal for interstate offerings. In May 2016, the SEC adopted the final rules
for federal crowdfunding. The final rule can be found at
https://www.sec.gov/rules/final/2015/33-9974.pdf.

When the SEC adopted the final rules governing interstate
crowdfunding, the states were preempted from requiring the registration of such
offerings. However, a state that is home to the principal place of business of
the issuer, or in which residents have purchased 50% or greater of the
aggregate offering amount, may require a notice filing that contains all
documents filed with the SEC together with a consent to service of process.

In order to facilitate that process, NASAA developed a model
notice filing so that the states could adopt the notice filing in a consistent
manner. This will allow interstate offerings to comply with the federal
crowdfunding rule and make the appropriate state notice filings.

The Division proposes that the Commission adopt the notice
filing requirement for federal crowdfunding offerings to include the Form U-CF
for notice filing.

Proposed Revision to Chapter 80. Registration and Renewal
Filing Fees for Investment Advisor Representatives: The proposed amendment to
Chapter 80 provides for an increase in the registration and annual renewal
filing fee for investment advisor representatives from $30 to $40. The fee has
not been raised since it was adopted by rule in 1981. From that time to the
present, the number and complexity of audits of these registrants' offices has
increased, necessitating the increase in the registration fee. The
Division will apply the additional fees to the cost to conduct audits.

The Division recommended to the Commission that the proposed
revisions should be considered for adoption. The Division also has recommended
to the Commission that a hearing should be held only if requested by those
interested parties who specifically indicate that a hearing is necessary and
the reasons therefore.

A copy of the proposed revisions may be requested by
interested parties from the Division by telephone, regular mail or email
request, and also can be found at the Division's website:
http://www.scc.virginia.gov/srf. Any comments to the proposed rules must be
received by November 1, 2017.

Accordingly, IT IS ORDERED THAT:

(1) The proposed revisions are appended hereto and made a
part of the record herein.

(2) On or before November 1, 2017, comments or request for
hearing on the proposed revisions must be submitted in writing to Joel H. Peck,
Clerk, State Corporation Commission, c/o Document Control Center, P.O. Box
2118, Richmond, Virginia 23218. Requests for hearing shall state why a hearing
is necessary and why the issues cannot be adequately addressed in written comments.
All correspondence shall reference Case No. SEC-2017-00034. Interested persons
desiring to submit comments electronically may do so by following the
instructions available at the Commission's website:
http://www.scc.virginia.gov/case.

(3) The proposed revisions shall be posted on the
Commission's website at http://www.scc.virginia.gov/case and on the Division's
website at http://www.scc.virginia.gov/srf. Interested persons also may request
a copy of the proposed revisions from the Division by telephone, mail, or
email.

AN ATTESTED COPY hereof, together with a copy of the proposed
revisions, shall be provided to the Registrar of Regulations for appropriate
publication in the Virginia Register of Regulations.

AN ATTESTED COPY hereof shall be sent to the Director of the
Division of Securities and Retail Franchising who shall forthwith provide
notice of this Order via U.S. mail or a copy of this Order may be sent by
e-mail to any interested persons as he may designate.

Part II
Broker-Dealer Agents

21VAC5-20-90. Application for registration as a broker-dealer
agent.

A. Application for registration as an agent of a FINRA member
shall be filed on and in compliance with all requirements of CRD and in full
compliance with the forms and regulations prescribed by the commission. The
application shall include all information required by such forms.

An application shall be deemed incomplete for registration as
a broker-dealer agent unless the applicant submits the following executed
forms, fee, and information:

1. Form U4.

2. The statutory fee made payable to FINRA in the amount of $30$40.

3. Evidence in the form of a FINRA exam report of passing
within the two-year period immediately preceding the date of the application:
(i) the Uniform Securities Agent State Law Examination, Series 63; (ii) the
Uniform Combined State Law Examination, Series 66; or (iii) a similar
examination in general use by securities administrators which, after reasonable
notice and subject to review by the commission, the Director of the Division of
Securities and Retail Franchising designates.

4. Any other information the commission may require.

B. Application for registration for non-FINRA member
broker-dealer agents shall be filed on and in compliance with all requirements
and forms prescribed by the commission.

An application shall be deemed incomplete for registration as
a broker-dealer agent unless the applicant submits the following executed
forms, fee, and information:

1. Form U4.

2. The statutory fee in the amount of $30$40.
The check must be made payable to the Treasurer of Virginia.

3. Evidence in the form of a FINRA exam report of passing
within the two-year period immediately preceding the date of the application:
(i) the Uniform Securities Agent State Law Examination, Series 63; (ii) the
Uniform Combined State Law Examination, Series 66; or (iii) a similar
examination in general use by securities administrators which, after reasonable
notice and subject to review by the commission, the Director of the Division of
Securities and Retail Franchising designates.

4. Any other information the commission may require.

C. The commission shall either grant or deny each application
for registration within 30 days after it is filed. However, if additional time
is needed to obtain or verify information regarding the application, the
commission may extend such period as much as 90 days by giving written notice
to the applicant. No more than three such extensions may be made by the
commission on any one application. An extension of the initial 30-day period,
not to exceed 90 days, shall be granted upon written request of the applicant.

21VAC5-20-110. Renewals.

A. To renew the registration or registrations of its
broker-dealer agent or agents, a FINRA member broker-dealer will be billed by
CRD the statutory fee of $30$40 per broker-dealer agent. A
renewal of registration or registrations shall be granted as a matter of course
upon payment of the proper fee or fees unless the registration was, or the
renewal would be, subject to revocation under § 13.1-506 of the Code of
Virginia.

B. A non-FINRA member broker-dealer shall file with the
commission at its Division of Securities and Retail Franchising the following
items at least 30 days prior to the expiration of registration.

1. Agents to be Renewed (Form S.D.4.A) accompanied by the
statutory fee of $30$40 for each agent whose registration
is to be renewed. The check must be made payable to the Treasurer of Virginia.

2. If applicable, Agents to be Canceled with clear records
(Form S.D.4.B).

3. If applicable, Agents to be Canceled without clear records
(Form S.D.4.C).

21VAC5-20-155. Limited Canadian broker-dealer agent
registration.

A. An agent of a Canadian broker-dealer who has no office or
other physical presence in the Commonwealth of Virginia may, provided the
broker-dealer agent is registered under this section, effect transactions in
securities as permitted for a broker-dealer registered under 21VAC5-20-85.

B. Application for registration as a broker-dealer agent
under this section shall be filed with the commission at its Division of
Securities and Retail Franchising or such other entity designated by the
commission on and in full compliance with forms prescribed by the commission
and shall include all information required by such forms.

C. An application for registration as a broker-dealer agent
under this section shall be deemed incomplete for purposes of applying for
registration unless the following executed forms, fee, and information are
submitted to the commission:

1. An application in the form required by the jurisdiction in
which the broker-dealer maintains its principal place of business.

2. Statutory fee payable to the Treasurer of Virginia in the
amount of $30$40 United States currency pursuant to
§ 13.1-505 G of the Act.

3. Evidence that the applicant is registered as a
broker-dealer agent in the jurisdiction from which it is effecting the
transactions.

4. Any other information the commission may require.

D. A broker-dealer agent registered under this section shall:

1. Maintain his provincial or territorial registration in good
standing;

2. Immediately notify the commission of any criminal action
taken against him or of any finding or sanction imposed on him as a result of
any self-regulatory or regulatory action involving fraud, theft, deceit,
misrepresentation or similar conduct.

E. A broker-dealer agent's registration under this section,
and any renewal thereof, shall expire annually at midnight on the 31st day of
December unless renewed in accordance with subsection F of this section.

F. To renew the registrations of its agents, a broker-dealer
registered under this section shall file with the commission at its division
the most recent renewal application, if any, filed in the jurisdiction in which
the broker-dealer maintains its principal place of business, or if no such
renewal application is required, the most recent application filed pursuant to
subdivision C 1 of this section along with the statutory fee in the amount of $30$40 United States currency pursuant to § 13.1-505 G of the Act.

G. A Canadian broker-dealer agent registered under this
section and acting in accordance with the limitations set out in this section
is exempt from all other rules applicable to a broker-dealer agent except the
anti-fraud provisions of the Act and the requirements set out in this section.

Part III
Agents of the Issuer

21VAC5-20-160. Application for registration as an agent of the
issuer.

A. Application for registration as an agent of the issuer
shall be filed on and in compliance with all requirements and forms prescribed
by the commission.

B. An application shall be deemed incomplete for registration
as an agent of the issuer unless the following executed forms, fee, and
information are submitted:

1. Form U4.

2. The statutory fee in the amount of $30$40.
The check must be made payable to the Treasurer of Virginia.

3. Evidence in the form of a FINRA exam report of passing
within the two-year period immediately preceding the date of the application:
(i) the Uniform Securities Agent State Law Examination, Series 63; (ii) the
Uniform Combined State Law Examination, Series 66; or (iii) a similar
examination in general use by securities administrators which, after reasonable
notice and subject to review by the commission, the Director of the Division of
Securities and Retail Franchising designates.

4. Any individual who meets the qualifications set forth in
subdivision B 3 of this section and has been registered in any state
jurisdiction requiring registration within the two-year period immediately
preceding the date of the filing of an application shall not be required to
comply with the examination requirement set forth in subdivision B 3 of this
section, except that the Director of Securities and Retail Franchising may
require additional examinations for any individual found to have violated any
federal or state securities laws.

5. Any other information the commission may require.

C. The commission shall either grant or deny each application
for registration within 30 days after it is filed. However, if additional time
is needed to obtain or verify information regarding the application, the
commission may extend such period as much as 90 days by giving written notice
to the applicant. No more than three such extensions may be made by the
commission on any one application. An extension of the initial 30-day period,
not to exceed 90 days, shall be granted upon written request of the applicant.

21VAC5-20-180. Renewals.

An issuer, on behalf of its agent or agents, shall file with
the commission at its Division of Securities and Retail Franchising at least 30
days prior to the expiration of registration a registration renewal form (Form
S.D.4) accompanied by the statutory fee of $30$40 for each agent
whose registration is to be renewed. The check must be made payable to the
Treasurer of Virginia.

The commission adopts the following NASAANorth
American Securities Administration Association, Inc. (NASAA) statements of
policy that shall apply to the registration of securities in the Commonwealth.
It will be considered a basis for denial of an application if an offering fails
to comply with an applicable statement of policy. While applications not
conforming to a statement of policy shall be looked upon with disfavor, where
good cause is shown, certain provisions may be modified or waived by the
commission.

A. Nothing in this exemption is intended to relieve, or
should be construed as in any way relieving, issuers or persons acting on their
behalf from providing disclosure to prospective investors adequate to satisfy
the anti-fraud provisions of the Act.

In view of the objective of this section and the purpose
and policies underlying the Act, this exemption is not available to an issuer
with respect to a transaction which, although in technical compliance with this
section, is part of a plan or scheme to evade registration or the conditions or
limitations explicitly stated in this section.

Nothing in this section is intended to exempt registered
broker-dealers or agents from the due diligence standards otherwise applicable
to such registered persons.

Nothing in this section is intended to exempt a person
from the broker-dealer or agent registration requirements of Article 3 (§
13.1-504 et seq.) of Chapter 5 of Title 13.1 of the Code of Virginia, except in
the case of an agent of the issuer who receives no sales commission directly or
indirectly for offering or selling the securities and who is not subject to
subdivision B 2 of this section.

B. For the purpose of the limited offering exemption
referred to in § 13.1-514 B 13 of the Act, the following securities are
determined to be exempt from the securities registration requirements of
Article 4 (§ 13.1-507 et seq.) of Chapter 5 of Title 13.1 of the Code of
Virginia.

Any securities offered or sold in compliance with the
Securities Act of 1933, Regulation D (Reg. D), Rules 230.501-230.503 and
230.505 and which satisfy the following further conditions and limitations:

1. The issuer and persons acting on its behalf shall have
reasonable grounds to believe, and after making reasonable inquiry shall
believe, that all persons who offer or sell securities subject to this section
are registered in accordance with § 13.1-505 of the Act except in the case of
an agent of the issuer who receives no sales commission directly or indirectly
for offering or selling the securities and who is not subject to subdivision 2
of this subsection.

2. No exemption under this section shall be available for
the securities of any issuer if any of the persons described in the Securities
Act of 1933, Regulation A, Rule 230.262(a), (b), or (c) (17 CFR 230.262):

a. Has filed a registration statement which is the subject
of a currently effective stop order entered pursuant to any state's securities
law within five years prior to the beginning of the offering.

b. Has been convicted within five years prior to the
beginning of the offering of a felony or misdemeanor in connection with the
purchase or sale of a security or a felony involving fraud or deceit, including
but not limited to forgery, embezzlement, obtaining money under false pretenses,
larceny or conspiracy to defraud.

c. Is currently subject to a state's administrative order
or judgment entered by that state's securities administrator within five years
prior to the beginning of the offering or is subject to a state's
administrative order or judgment in which fraud or deceit, including but not
limited to making untrue statements of material facts or omitting to state
material facts, was found and the order or judgment was entered within five
years prior to the beginning of the offering.

d. Is currently subject to a state's administrative order
or judgment which prohibits the use of any exemption from registration in
connection with the purchase or sale of securities.

e. Is currently subject to an order, judgment, or decree of
a court of competent jurisdiction temporarily or preliminarily restraining or
enjoining, or is subject to an order, judgment or decree of any court of
competent jurisdiction, entered within five years prior to the beginning of the
offering, permanently restraining or enjoining such person from engaging in or
continuing any conduct or practice in connection with the purchase or sale of
any security or involving the making of a false filing with a state.

f. The prohibitions of subdivisions a, b, c and e of this
subdivision shall not apply if the party subject to the disqualifying order,
judgment or decree is duly licensed or registered to conduct securities related
business in the state in which the administrative order, judgment or decree was
entered against such party.

g. A disqualification caused by this subsection is
automatically waived if the state securities administrator or agency of the
state which created the basis for disqualification, or the State Corporation
Commission, determines upon a showing of good cause that it is not necessary
under the circumstances that the exemption under this section be denied.

3. The issuer shall file with the commission no later than
15 days after the first sale in this state from an offering being made in
reliance upon this exemption:

a. A notice on Form D (17 CFR 239.500), as filed with the
SEC.

b. A filing fee of $250 payable to the Treasurer of
Virginia.

4. In sales to nonaccredited investors, the issuer and
persons acting on its behalf shall have reasonable grounds to believe, and
after making reasonable inquiry shall believe, that the investment is suitable
for the purchaser as to the purchaser's other security holdings and financial
situation and needs.

5. Offers and sales of securities which are exempted by
this section shall not be combined with offers and sales of securities exempted
by another regulation or section of the Act; however, nothing in this
limitation shall act as an election. The issuer may claim the availability of
another applicable exemption should, for any reason, the securities or persons
fail to comply with the conditions and limitations of this exemption.

6. In any proceeding involving this section, the burden of
proving the exemption or an exception from a definition or condition is upon
the person claiming it.

C. The exemption authorized by this section shall be known
and may be cited as the "Uniform Limited Offering Exemption."

21VAC5-45-40. Federal crowdfunding offerings.

A. An issuer that offers and sells securities in the
Commonwealth in an offering exempt under federal Regulation Crowdfunding (17
CFR 227.100 through 17 CFR 227.503) and §§ 4(a)(6) and 18(b)(4)(c) of the
Securities Act of 1933 (15 USC § 77a), and that either (i) has its principal
place of business in the Commonwealth or (ii) sells 50% or greater of the
aggregate amount of the offering to residents of the Commonwealth, shall file
the following with the commission:

1. A completed Uniform Notice of Federal Crowdfunding
Offering form or copies of all documents filed with the Securities and Exchange
Commission (SEC); and

2. A consent to service of process on Form U-2 if not
filing on the Uniform Notice of Federal Crowdfunding form.

B. If the issuer has its principal place of business in
the Commonwealth, the filing required under subsection A of this section shall
be filed with the commission when the issuer makes its initial Form C filing
concerning the offering with the SEC. If the issuer does not have its principal
place of business in the Commonwealth but residents of the Commonwealth have
purchased 50% or greater of the aggregate amount of the offering, the filing
required under subsection A of this section shall be filed when the issuer
becomes aware that such purchases have met this threshold and in no event later
than 30 days from the date of completion of the offering.

C. The initial notice filing is effective for 12 months
from the date of the filing with the commission.

D. For each additional 12-month period in which the same
offering is continued, an issuer conducting an offering under federal
Regulation Crowdfunding may renew its notice filing by filing on or before the
expiration of the notice filing a completed Uniform Notice of Federal
Crowdfunding Offering form marked "renewal" or a cover letter or
other document requesting renewal.

E. An issuer may increase the amount of securities offered
in the Commonwealth by submitting a completed Uniform Notice of Federal
Crowdfunding Offering form marked "amendment" or other document
describing the transaction.

NOTICE: The following
forms used in administering the regulation were filed by the agency. The forms
are not being published; however, online users of this issue of the Virginia
Register of Regulations may click on the name of a form with a hyperlink to
access it. The forms are also available from the agency contact or may be
viewed at the Office of the Registrar of Regulations, 900 East Main Street,
11th Floor, Richmond, Virginia 23219.

Part II
Investment Advisor Representative Registration, Expiration, Updates and
Amendments, Termination, and Changing Connection from One Investment Advisor to
Another

21VAC5-80-70. Application for registration as an investment
advisor representative.

A. Application for registration as an investment advisor
representative shall be filed in compliance with all requirements of CRD and in
full compliance with forms and regulations prescribed by the commission. The
application shall include all information required by such forms.

B. An application shall be deemed incomplete for registration
as an investment advisor representative unless the following executed forms,
fee, and information are submitted:

1. Form U4.

2. The statutory fee made payable to FINRA in the amount of $30$40.

3. Evidence of passing: (i) the Uniform Investment Adviser Law
Examination, Series 65; (ii) the Uniform Combined State Law Examination, Series
66, and the General Securities Representative Examination, Series 7; or (iii) a
similar examination in general use by securities administrators which, after
reasonable notice and subject to review by the commission, the Director of the
Division of Securities and Retail Franchising designates.

4. All individuals listed on Part 1 of Form ADV in Schedule A
and Item 2. A. of Part 1B as having supervisory responsibilities of the
investment advisor shall take and pass the examinations as required in
subdivision 3 of this subsection, and register as a representative of the
investment advisor.

5. Any other information the commission may require.

C. The commission shall either grant or deny each application
for registration within 30 days after it is filed. However, if additional time
is needed to obtain or verify information regarding the application, the
commission may extend such period as much as 90 days by giving written notice
to the applicant. No more than three such extensions may be made by the
commission on any one application. An extension of the initial 30-day period,
not to exceed 90 days, shall be granted upon written request of the applicant.

21VAC5-80-90. Renewals.

To renew the registration of its investment advisor
representatives, an investment advisor or federal covered advisor will be
billed by IARD the statutory fee of $30$40 per investment
advisor representative. A renewal of registration shall be granted as a matter
of course upon payment of the proper fee or fees unless the registration was,
or the renewal would be, subject to revocation under § 13.1-506 of the
Act.

VA.R. Doc. No. R18-5046; Filed September 26, 2017, 11:48 a.m.

TITLE 21. SECURITIES AND RETAIL FRANCHISING

STATE CORPORATION COMMISSION

Proposed Regulation

REGISTRAR'S NOTICE: The
State Corporation Commission is claiming an exemption from the Administrative
Process Act in accordance with § 2.2-4002 A 2 of the Code of Virginia,
which exempts courts, any agency of the Supreme Court, and any agency that by
the Constitution is expressly granted any of the powers of a court of record.

The proposed regulatory action pertains to the
administration and enforcement of the Virginia Securities Act and affects
several regulatory chapters. Proposed amendments to 21VAC5-20, Broker-dealers,
Broker-dealer Agents and Agents of the Issuer, and 21VAC5-80, Investment
Advisors, increase the registration and annual renewal filing fee to $40 for
broker-dealer agents, agents of the issuer, and investment advisor
representatives. Proposed amendments to 21VAC5-30, Securities Registration,
update the Oil and Gas Programs statements of policy and add four statements of
policy of the North American Securities Administrators Association, as follows:
Promotional Shares, Loans & Other Material Transactions, Impoundment of
Proceeds, and Electronic Offering Documents and Electronic Signatures. The
proposed action repeals the section of 21VAC5-40, Exempt Securities and
Transactions, regarding the Regulation D, Rule 505 exemption due to the repeal
of Rule 505 by the U.S. Securities and Exchange Commission (SEC) in October
2016. A new section is proposed in 21VAC5-45, Federal Covered Securities, to
establish a notice filing requirement for issuers conducting a federal
crowdfunding securities offering. In May of 2016, the SEC adopted the final
rules for federal crowdfunding that preempted the requirement of the
registration of these offerings. However, a state that is home to the principal
place of business of the issuer or in which residents have purchased 50% or
more of the offering amount may require a notice filing that contains all
documents filed with the SEC together with a consent to service of process.

AT RICHMOND, SEPTEMBER 26, 2017

COMMONWEALTH OF VIRGINIA, ex rel.

STATE CORPORATION COMMISSION

CASE NO. SEC-2017-00034

Ex Parte: In the matter of
Adopting a Revision to the Rules
Governing the Virginia Securities Act

ORDER TO TAKE NOTICE

Section 12.1-13 of the Code of Virginia ("Code")
provides that the State Corporation Commission ("Commission") shall
have the power to promulgate rules and regulations in the enforcement and
administration of all laws within its jurisdiction. Section 13.1-523 of the
Virginia Securities Act ("Act"), § 13.1-501 et seq. of the Code
provides that the Commission may issue any rules and regulations necessary or
appropriate for the administration and enforcement of the Act.

The rules and regulations issued by the Commission pursuant
to the Act are set forth in Title 21 of the Virginia Administrative Code. A
copy also may be found at the Commission's website:
http://www.scc.virginia.gov/case.

Proposed Revision to Chapter 20. Registration and Renewal
Filing Fees for Agents: The proposed amendment to Chapter 20 provides for an
increase in the registration and annual renewal filing fee for broker-dealer
agents (including Canadian agents) and agents of the issuer from $30 to $40.
The fee has not been raised since it was adopted by rule in 1981. From that
time to the present, the number and complexity of audits of these registrants'
offices has increased, necessitating the increase in the registration fee. The
Division of Securities and Retail Franchising ("Division") will apply
the additional fees towards the cost to conduct audits.

Proposed Revision to Chapter 30. Adoption of Statements of
Policy: The Division is a member of the North American Securities
Administrators Association ("NASAA"), a trade association of state
regulators. As a member of NASAA, the Division participates in a nationwide
effort to use a uniform approach to the review of offerings registered in the
states. From time to time, NASAA revises and adds to the list of standard
policies applicable to certain offerings. The Division is updating and revising
its list of these statements to add four additional items: Promotional Shares,
Loans and Other Material Transactions, Impoundment of Proceeds, and Electronic
Offering Documents and Electronic Signatures. The last item, Electronic
Offering Documents and Electronic Signatures, will allow issuers to move away
from providing investors with large cumbersome prospectuses and provide for the
electronic delivery and signatures.

Proposed Revision to Chapter 40. Repeal of Regulation D, Rule
505: In 1983, the Division adopted by rule (as amended) an exemption
promulgated by the United States Securities and Exchange Commission
("SEC") known as Regulation D that provided for an exemption for
offerings of up to $5 million of securities in any 12-month period to an
unlimited number of accredited investors and up to 35 non-accredited but
sophisticated investors, as long as non-accredited investors are provided
certain prescribed information about the issuer and the securities. Regulation
D, Rule 505 of Section 3(a)(11) of the Securities Act of 1933 ("1933
Act"), and Rule 147 thereunder provide an exemption from the 1933 Act
registration for offerings within a single state by issuers incorporated or
organized, having their principal office and doing business in such state. In October
2016, the SEC repealed Rule 505, making the companion subsection under the
current Commission regulations unnecessary. The Division proposes that the
section be repealed.

Revision to Chapter 45. Adoption of Federal Crowdfunding:
In 2015, the Division proposed an exemption from registration for certain
intrastate offerings known as crowdfunding. The Virginia Intrastate
Crowdfunding Exemption was adopted by the Commission in July 2015 under
Commission Rule 21VAC5-40-190. At the time that the Commission developed the
intrastate crowdfunding exemption, the SEC was working on a crowdfunding
proposal for interstate offerings. In May 2016, the SEC adopted the final rules
for federal crowdfunding. The final rule can be found at
https://www.sec.gov/rules/final/2015/33-9974.pdf.

When the SEC adopted the final rules governing interstate
crowdfunding, the states were preempted from requiring the registration of such
offerings. However, a state that is home to the principal place of business of
the issuer, or in which residents have purchased 50% or greater of the
aggregate offering amount, may require a notice filing that contains all
documents filed with the SEC together with a consent to service of process.

In order to facilitate that process, NASAA developed a model
notice filing so that the states could adopt the notice filing in a consistent
manner. This will allow interstate offerings to comply with the federal
crowdfunding rule and make the appropriate state notice filings.

The Division proposes that the Commission adopt the notice
filing requirement for federal crowdfunding offerings to include the Form U-CF
for notice filing.

Proposed Revision to Chapter 80. Registration and Renewal
Filing Fees for Investment Advisor Representatives: The proposed amendment to
Chapter 80 provides for an increase in the registration and annual renewal
filing fee for investment advisor representatives from $30 to $40. The fee has
not been raised since it was adopted by rule in 1981. From that time to the
present, the number and complexity of audits of these registrants' offices has
increased, necessitating the increase in the registration fee. The
Division will apply the additional fees to the cost to conduct audits.

The Division recommended to the Commission that the proposed
revisions should be considered for adoption. The Division also has recommended
to the Commission that a hearing should be held only if requested by those
interested parties who specifically indicate that a hearing is necessary and
the reasons therefore.

A copy of the proposed revisions may be requested by
interested parties from the Division by telephone, regular mail or email
request, and also can be found at the Division's website:
http://www.scc.virginia.gov/srf. Any comments to the proposed rules must be
received by November 1, 2017.

Accordingly, IT IS ORDERED THAT:

(1) The proposed revisions are appended hereto and made a
part of the record herein.

(2) On or before November 1, 2017, comments or request for
hearing on the proposed revisions must be submitted in writing to Joel H. Peck,
Clerk, State Corporation Commission, c/o Document Control Center, P.O. Box
2118, Richmond, Virginia 23218. Requests for hearing shall state why a hearing
is necessary and why the issues cannot be adequately addressed in written comments.
All correspondence shall reference Case No. SEC-2017-00034. Interested persons
desiring to submit comments electronically may do so by following the
instructions available at the Commission's website:
http://www.scc.virginia.gov/case.

(3) The proposed revisions shall be posted on the
Commission's website at http://www.scc.virginia.gov/case and on the Division's
website at http://www.scc.virginia.gov/srf. Interested persons also may request
a copy of the proposed revisions from the Division by telephone, mail, or
email.

AN ATTESTED COPY hereof, together with a copy of the proposed
revisions, shall be provided to the Registrar of Regulations for appropriate
publication in the Virginia Register of Regulations.

AN ATTESTED COPY hereof shall be sent to the Director of the
Division of Securities and Retail Franchising who shall forthwith provide
notice of this Order via U.S. mail or a copy of this Order may be sent by
e-mail to any interested persons as he may designate.

Part II
Broker-Dealer Agents

21VAC5-20-90. Application for registration as a broker-dealer
agent.

A. Application for registration as an agent of a FINRA member
shall be filed on and in compliance with all requirements of CRD and in full
compliance with the forms and regulations prescribed by the commission. The
application shall include all information required by such forms.

An application shall be deemed incomplete for registration as
a broker-dealer agent unless the applicant submits the following executed
forms, fee, and information:

1. Form U4.

2. The statutory fee made payable to FINRA in the amount of $30$40.

3. Evidence in the form of a FINRA exam report of passing
within the two-year period immediately preceding the date of the application:
(i) the Uniform Securities Agent State Law Examination, Series 63; (ii) the
Uniform Combined State Law Examination, Series 66; or (iii) a similar
examination in general use by securities administrators which, after reasonable
notice and subject to review by the commission, the Director of the Division of
Securities and Retail Franchising designates.

4. Any other information the commission may require.

B. Application for registration for non-FINRA member
broker-dealer agents shall be filed on and in compliance with all requirements
and forms prescribed by the commission.

An application shall be deemed incomplete for registration as
a broker-dealer agent unless the applicant submits the following executed
forms, fee, and information:

1. Form U4.

2. The statutory fee in the amount of $30$40.
The check must be made payable to the Treasurer of Virginia.

3. Evidence in the form of a FINRA exam report of passing
within the two-year period immediately preceding the date of the application:
(i) the Uniform Securities Agent State Law Examination, Series 63; (ii) the
Uniform Combined State Law Examination, Series 66; or (iii) a similar
examination in general use by securities administrators which, after reasonable
notice and subject to review by the commission, the Director of the Division of
Securities and Retail Franchising designates.

4. Any other information the commission may require.

C. The commission shall either grant or deny each application
for registration within 30 days after it is filed. However, if additional time
is needed to obtain or verify information regarding the application, the
commission may extend such period as much as 90 days by giving written notice
to the applicant. No more than three such extensions may be made by the
commission on any one application. An extension of the initial 30-day period,
not to exceed 90 days, shall be granted upon written request of the applicant.

21VAC5-20-110. Renewals.

A. To renew the registration or registrations of its
broker-dealer agent or agents, a FINRA member broker-dealer will be billed by
CRD the statutory fee of $30$40 per broker-dealer agent. A
renewal of registration or registrations shall be granted as a matter of course
upon payment of the proper fee or fees unless the registration was, or the
renewal would be, subject to revocation under § 13.1-506 of the Code of
Virginia.

B. A non-FINRA member broker-dealer shall file with the
commission at its Division of Securities and Retail Franchising the following
items at least 30 days prior to the expiration of registration.

1. Agents to be Renewed (Form S.D.4.A) accompanied by the
statutory fee of $30$40 for each agent whose registration
is to be renewed. The check must be made payable to the Treasurer of Virginia.

2. If applicable, Agents to be Canceled with clear records
(Form S.D.4.B).

3. If applicable, Agents to be Canceled without clear records
(Form S.D.4.C).

21VAC5-20-155. Limited Canadian broker-dealer agent
registration.

A. An agent of a Canadian broker-dealer who has no office or
other physical presence in the Commonwealth of Virginia may, provided the
broker-dealer agent is registered under this section, effect transactions in
securities as permitted for a broker-dealer registered under 21VAC5-20-85.

B. Application for registration as a broker-dealer agent
under this section shall be filed with the commission at its Division of
Securities and Retail Franchising or such other entity designated by the
commission on and in full compliance with forms prescribed by the commission
and shall include all information required by such forms.

C. An application for registration as a broker-dealer agent
under this section shall be deemed incomplete for purposes of applying for
registration unless the following executed forms, fee, and information are
submitted to the commission:

1. An application in the form required by the jurisdiction in
which the broker-dealer maintains its principal place of business.

2. Statutory fee payable to the Treasurer of Virginia in the
amount of $30$40 United States currency pursuant to
§ 13.1-505 G of the Act.

3. Evidence that the applicant is registered as a
broker-dealer agent in the jurisdiction from which it is effecting the
transactions.

4. Any other information the commission may require.

D. A broker-dealer agent registered under this section shall:

1. Maintain his provincial or territorial registration in good
standing;

2. Immediately notify the commission of any criminal action
taken against him or of any finding or sanction imposed on him as a result of
any self-regulatory or regulatory action involving fraud, theft, deceit,
misrepresentation or similar conduct.

E. A broker-dealer agent's registration under this section,
and any renewal thereof, shall expire annually at midnight on the 31st day of
December unless renewed in accordance with subsection F of this section.

F. To renew the registrations of its agents, a broker-dealer
registered under this section shall file with the commission at its division
the most recent renewal application, if any, filed in the jurisdiction in which
the broker-dealer maintains its principal place of business, or if no such
renewal application is required, the most recent application filed pursuant to
subdivision C 1 of this section along with the statutory fee in the amount of $30$40 United States currency pursuant to § 13.1-505 G of the Act.

G. A Canadian broker-dealer agent registered under this
section and acting in accordance with the limitations set out in this section
is exempt from all other rules applicable to a broker-dealer agent except the
anti-fraud provisions of the Act and the requirements set out in this section.

Part III
Agents of the Issuer

21VAC5-20-160. Application for registration as an agent of the
issuer.

A. Application for registration as an agent of the issuer
shall be filed on and in compliance with all requirements and forms prescribed
by the commission.

B. An application shall be deemed incomplete for registration
as an agent of the issuer unless the following executed forms, fee, and
information are submitted:

1. Form U4.

2. The statutory fee in the amount of $30$40.
The check must be made payable to the Treasurer of Virginia.

3. Evidence in the form of a FINRA exam report of passing
within the two-year period immediately preceding the date of the application:
(i) the Uniform Securities Agent State Law Examination, Series 63; (ii) the
Uniform Combined State Law Examination, Series 66; or (iii) a similar
examination in general use by securities administrators which, after reasonable
notice and subject to review by the commission, the Director of the Division of
Securities and Retail Franchising designates.

4. Any individual who meets the qualifications set forth in
subdivision B 3 of this section and has been registered in any state
jurisdiction requiring registration within the two-year period immediately
preceding the date of the filing of an application shall not be required to
comply with the examination requirement set forth in subdivision B 3 of this
section, except that the Director of Securities and Retail Franchising may
require additional examinations for any individual found to have violated any
federal or state securities laws.

5. Any other information the commission may require.

C. The commission shall either grant or deny each application
for registration within 30 days after it is filed. However, if additional time
is needed to obtain or verify information regarding the application, the
commission may extend such period as much as 90 days by giving written notice
to the applicant. No more than three such extensions may be made by the
commission on any one application. An extension of the initial 30-day period,
not to exceed 90 days, shall be granted upon written request of the applicant.

21VAC5-20-180. Renewals.

An issuer, on behalf of its agent or agents, shall file with
the commission at its Division of Securities and Retail Franchising at least 30
days prior to the expiration of registration a registration renewal form (Form
S.D.4) accompanied by the statutory fee of $30$40 for each agent
whose registration is to be renewed. The check must be made payable to the
Treasurer of Virginia.

The commission adopts the following NASAANorth
American Securities Administration Association, Inc. (NASAA) statements of
policy that shall apply to the registration of securities in the Commonwealth.
It will be considered a basis for denial of an application if an offering fails
to comply with an applicable statement of policy. While applications not
conforming to a statement of policy shall be looked upon with disfavor, where
good cause is shown, certain provisions may be modified or waived by the
commission.

A. Nothing in this exemption is intended to relieve, or
should be construed as in any way relieving, issuers or persons acting on their
behalf from providing disclosure to prospective investors adequate to satisfy
the anti-fraud provisions of the Act.

In view of the objective of this section and the purpose
and policies underlying the Act, this exemption is not available to an issuer
with respect to a transaction which, although in technical compliance with this
section, is part of a plan or scheme to evade registration or the conditions or
limitations explicitly stated in this section.

Nothing in this section is intended to exempt registered
broker-dealers or agents from the due diligence standards otherwise applicable
to such registered persons.

Nothing in this section is intended to exempt a person
from the broker-dealer or agent registration requirements of Article 3 (§
13.1-504 et seq.) of Chapter 5 of Title 13.1 of the Code of Virginia, except in
the case of an agent of the issuer who receives no sales commission directly or
indirectly for offering or selling the securities and who is not subject to
subdivision B 2 of this section.

B. For the purpose of the limited offering exemption
referred to in § 13.1-514 B 13 of the Act, the following securities are
determined to be exempt from the securities registration requirements of
Article 4 (§ 13.1-507 et seq.) of Chapter 5 of Title 13.1 of the Code of
Virginia.

Any securities offered or sold in compliance with the
Securities Act of 1933, Regulation D (Reg. D), Rules 230.501-230.503 and
230.505 and which satisfy the following further conditions and limitations:

1. The issuer and persons acting on its behalf shall have
reasonable grounds to believe, and after making reasonable inquiry shall
believe, that all persons who offer or sell securities subject to this section
are registered in accordance with § 13.1-505 of the Act except in the case of
an agent of the issuer who receives no sales commission directly or indirectly
for offering or selling the securities and who is not subject to subdivision 2
of this subsection.

2. No exemption under this section shall be available for
the securities of any issuer if any of the persons described in the Securities
Act of 1933, Regulation A, Rule 230.262(a), (b), or (c) (17 CFR 230.262):

a. Has filed a registration statement which is the subject
of a currently effective stop order entered pursuant to any state's securities
law within five years prior to the beginning of the offering.

b. Has been convicted within five years prior to the
beginning of the offering of a felony or misdemeanor in connection with the
purchase or sale of a security or a felony involving fraud or deceit, including
but not limited to forgery, embezzlement, obtaining money under false pretenses,
larceny or conspiracy to defraud.

c. Is currently subject to a state's administrative order
or judgment entered by that state's securities administrator within five years
prior to the beginning of the offering or is subject to a state's
administrative order or judgment in which fraud or deceit, including but not
limited to making untrue statements of material facts or omitting to state
material facts, was found and the order or judgment was entered within five
years prior to the beginning of the offering.

d. Is currently subject to a state's administrative order
or judgment which prohibits the use of any exemption from registration in
connection with the purchase or sale of securities.

e. Is currently subject to an order, judgment, or decree of
a court of competent jurisdiction temporarily or preliminarily restraining or
enjoining, or is subject to an order, judgment or decree of any court of
competent jurisdiction, entered within five years prior to the beginning of the
offering, permanently restraining or enjoining such person from engaging in or
continuing any conduct or practice in connection with the purchase or sale of
any security or involving the making of a false filing with a state.

f. The prohibitions of subdivisions a, b, c and e of this
subdivision shall not apply if the party subject to the disqualifying order,
judgment or decree is duly licensed or registered to conduct securities related
business in the state in which the administrative order, judgment or decree was
entered against such party.

g. A disqualification caused by this subsection is
automatically waived if the state securities administrator or agency of the
state which created the basis for disqualification, or the State Corporation
Commission, determines upon a showing of good cause that it is not necessary
under the circumstances that the exemption under this section be denied.

3. The issuer shall file with the commission no later than
15 days after the first sale in this state from an offering being made in
reliance upon this exemption:

a. A notice on Form D (17 CFR 239.500), as filed with the
SEC.

b. A filing fee of $250 payable to the Treasurer of
Virginia.

4. In sales to nonaccredited investors, the issuer and
persons acting on its behalf shall have reasonable grounds to believe, and
after making reasonable inquiry shall believe, that the investment is suitable
for the purchaser as to the purchaser's other security holdings and financial
situation and needs.

5. Offers and sales of securities which are exempted by
this section shall not be combined with offers and sales of securities exempted
by another regulation or section of the Act; however, nothing in this
limitation shall act as an election. The issuer may claim the availability of
another applicable exemption should, for any reason, the securities or persons
fail to comply with the conditions and limitations of this exemption.

6. In any proceeding involving this section, the burden of
proving the exemption or an exception from a definition or condition is upon
the person claiming it.

C. The exemption authorized by this section shall be known
and may be cited as the "Uniform Limited Offering Exemption."

21VAC5-45-40. Federal crowdfunding offerings.

A. An issuer that offers and sells securities in the
Commonwealth in an offering exempt under federal Regulation Crowdfunding (17
CFR 227.100 through 17 CFR 227.503) and §§ 4(a)(6) and 18(b)(4)(c) of the
Securities Act of 1933 (15 USC § 77a), and that either (i) has its principal
place of business in the Commonwealth or (ii) sells 50% or greater of the
aggregate amount of the offering to residents of the Commonwealth, shall file
the following with the commission:

1. A completed Uniform Notice of Federal Crowdfunding
Offering form or copies of all documents filed with the Securities and Exchange
Commission (SEC); and

2. A consent to service of process on Form U-2 if not
filing on the Uniform Notice of Federal Crowdfunding form.

B. If the issuer has its principal place of business in
the Commonwealth, the filing required under subsection A of this section shall
be filed with the commission when the issuer makes its initial Form C filing
concerning the offering with the SEC. If the issuer does not have its principal
place of business in the Commonwealth but residents of the Commonwealth have
purchased 50% or greater of the aggregate amount of the offering, the filing
required under subsection A of this section shall be filed when the issuer
becomes aware that such purchases have met this threshold and in no event later
than 30 days from the date of completion of the offering.

C. The initial notice filing is effective for 12 months
from the date of the filing with the commission.

D. For each additional 12-month period in which the same
offering is continued, an issuer conducting an offering under federal
Regulation Crowdfunding may renew its notice filing by filing on or before the
expiration of the notice filing a completed Uniform Notice of Federal
Crowdfunding Offering form marked "renewal" or a cover letter or
other document requesting renewal.

E. An issuer may increase the amount of securities offered
in the Commonwealth by submitting a completed Uniform Notice of Federal
Crowdfunding Offering form marked "amendment" or other document
describing the transaction.

NOTICE: The following
forms used in administering the regulation were filed by the agency. The forms
are not being published; however, online users of this issue of the Virginia
Register of Regulations may click on the name of a form with a hyperlink to
access it. The forms are also available from the agency contact or may be
viewed at the Office of the Registrar of Regulations, 900 East Main Street,
11th Floor, Richmond, Virginia 23219.

Part II
Investment Advisor Representative Registration, Expiration, Updates and
Amendments, Termination, and Changing Connection from One Investment Advisor to
Another

21VAC5-80-70. Application for registration as an investment
advisor representative.

A. Application for registration as an investment advisor
representative shall be filed in compliance with all requirements of CRD and in
full compliance with forms and regulations prescribed by the commission. The
application shall include all information required by such forms.

B. An application shall be deemed incomplete for registration
as an investment advisor representative unless the following executed forms,
fee, and information are submitted:

1. Form U4.

2. The statutory fee made payable to FINRA in the amount of $30$40.

3. Evidence of passing: (i) the Uniform Investment Adviser Law
Examination, Series 65; (ii) the Uniform Combined State Law Examination, Series
66, and the General Securities Representative Examination, Series 7; or (iii) a
similar examination in general use by securities administrators which, after
reasonable notice and subject to review by the commission, the Director of the
Division of Securities and Retail Franchising designates.

4. All individuals listed on Part 1 of Form ADV in Schedule A
and Item 2. A. of Part 1B as having supervisory responsibilities of the
investment advisor shall take and pass the examinations as required in
subdivision 3 of this subsection, and register as a representative of the
investment advisor.

5. Any other information the commission may require.

C. The commission shall either grant or deny each application
for registration within 30 days after it is filed. However, if additional time
is needed to obtain or verify information regarding the application, the
commission may extend such period as much as 90 days by giving written notice
to the applicant. No more than three such extensions may be made by the
commission on any one application. An extension of the initial 30-day period,
not to exceed 90 days, shall be granted upon written request of the applicant.

21VAC5-80-90. Renewals.

To renew the registration of its investment advisor
representatives, an investment advisor or federal covered advisor will be
billed by IARD the statutory fee of $30$40 per investment
advisor representative. A renewal of registration shall be granted as a matter
of course upon payment of the proper fee or fees unless the registration was,
or the renewal would be, subject to revocation under § 13.1-506 of the
Act.